Submitted by Tyler Durden on 09/29/2015 - 09:02 convincing equity that company is viable is one thing (and the company and its sellside cheerleaders sure are trying). Convincing the far more skeptical bond market, which is desperately trying to figure out the counterparty risk, will be far more difficult...
The US markets awoke to news of several big, disturbing overseas events:
Glencore implodes. Think of Swiss commodities giant Glencore as a modern version of Enron, in the sense that it owns physical assets like mines and oil wells around the world and runs perhaps the biggest commodities derivatives trading desk. And — also like Enron — it’s apparently unprepared for extreme commodity price volatility. This morning its stock price plunged even further and its credit default swaps — the cost of insuring payment on its its bonds — blew out to record levels.
Are we about to witness the most important global financial event since the collapse of Lehman Brothers in 2008? Glencore has been known as the largest commodities trading company on the entire planet, and at one time it was ranked as the 10th biggest company in the world. It is linked to trillions of dollars of derivatives trades globally, and if the firm were to implode it would be a financial disaster unlike anything that we have seen in Europe since the end of World War II. Unfortunately, all signs are pointing to an inescapable death spiral for Glencore at this point. The stock price was down nearly 30 percent on Monday, and overall Glencore stock has plunged nearly 80 percent since May. There are certainly other candidates for “the next Lehman” (Petrobras and Deutsche Bank being two perfect examples), but Glencore has definitely surged to the front of the pack. Right now many analysts are openly wondering if the firm will even be able to survive to the end of next month.
Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1132.00 down $14.00 (comex closing time)
Silver $14.54 down 57 cents.
In the access market 5:15 pm
I wrote the following last Thursday:
“On the 24th of September, the comex options expired but we still have the LBMA options as well as the OTC options. Expect gold and silver to be relatively subdued until Oct 1.2015.”
Goldman Capitulates, Cuts S&P 500 Earnings Forecast And Price Target; Sees Market At 2,000 By Year EndSubmitted by Tyler Durden on 09/29/2015 - 07:18 With three months left in the year, we were wondering how long it would take before Goldman's equity strategist would throw in the towel on his increasingly improbable (unless of course the Fed launches QE4, NIRP and/or helicopter money in the coming months) year-end S&P500 price target of 2100. The answer: not very long, as this is precisely what Goldman did overnight, when it cut both its 2015 and 2016 EPS forecasts (to $109 and $120 from $114 and $126), with a corresponding cut in Goldman's 2015 year-end price target from 2100 to 2,000, rising to a nice round 2,100 the year following.
Submitted by Tyler Durden on 09/29/2015 - 07:04 "They don't understand the treacherous path they are going down. God knows where this is going. It's very dangerous and could be disastrous."
Submitted by Tyler Durden on 09/29/2015 - 10:09 For the second month in a row, US Consumer Confidence (according to The Conference Board) soared in September. Printing 103.00 (smashing expectations of 96.8) in September, this is just shy of January's high going back to August 2007. The biggest driver of this seemingly odd exuberance (amid global escalation in financial and physical wars) is the Present Situation (up from 115.8 to 121.1) while "hope" dropped from 91.6 to 91.0. As The Conference Board concludes, "while consumers view current economic conditions more favorably, they do not foresee growth accelerating in the months ahead.”
Submitted by Tyler Durden on 09/29/2015 - 09:52 Superficially one gets the impression that they aren’t really trying to “explain” anything to the hoi-polloi, since it all sounds remarkably uncoordinated. To the extent that the messages are contradictory, they merely reveal the literal impossibility of central planning – neither Dudley nor Evans can possibly know at what level short term interest rates should be set.
Submitted by Tyler Durden on 09/29/2015 - 09:33 Forget China, Volkswagen, Glencore, Noble, and pretty much everything else. The only catalyst that matters for today's price action has just been revealed. Earlier today, Dennis Gartman, whose flop-flip-flop-flipping calls on stocks, commodities and everything else have become a blur, just went mega bearish, and is predicting that the S&P has some 400 points of imminent downside.
Submitted by Tyler Durden on 09/29/2015 - 09:09 For the 5th month in a row, Case-Shiller home prices missed expectations and dropped 0.2% MoM in July (the biggest drop since July 2014). Year-over-year, home prices have been stable around a 5% increase for 6 months which seems oddly linear and seasonally-smoothed, but broad price gains YoY also disappointed again, rising 4.7% (against 5.2% expectations). San Francisco and Denver continue to see the highest YoY gains (10.4% and 10.3% respectively) and Phoenix posted its 8th consecutive annual gain - the longest streak among the 20 major cities Case-Shiller track.
Submitted by Tyler Durden on 09/29/2015 - 08:38 We call on central banks to abolish their zero interest rate policy (ZIRP) framework before more harm is done. In our assessment, ZIRP is bad for all stakeholders and may even lead to war.
Submitted by Tyler Durden on 09/29/2015 - 08:21 In the latest sign easy-money market froth may be peaking, moments ago German media conglomerate Axel Springer announced it has agreed to buy 88% of web-only Business Insider, adding to the 9% it already owns, for $343 million, which according to the Springer press release values 100% of the content aggregator at $442 million "on the basis of a cash and debt free valuation of USD 390 million." The remaining 3% of the company will be retained by Bezos Expeditions, the personal investment company of Jeff Bezos, who purchased a $5 million stake in 2013.
India "Surprises" 51 Out Of 52 "Experts", Slashes Rates More Than Expected As Easing Bonanza ContinuesSubmitted by Tyler Durden on 09/29/2015 - 08:01 "Rate cuts should not be seen as goodies that the RBI gives out stingily after much public pleading"...
- Commodities in crisis as Asian shares tumble and shipper files for bankruptcy (Reuters)
- Global Rout Eases as S&P 500 Futures Advance With Oil, Glencore (BBG)
- Chinese Stocks Decline Most in a Month in Hong Kong on Economy (BBG)
- India cuts interest rates by more than expected (BBC)
- Glencore Rebounds as $50 Billion Plunge Is Seen as Excessive (BBG)
- How Congress May Have Saved Goldman Sachs From Itself (BBG)
Asian Equities Tumble On Commodity Fears; US Futures Rebound After India "Unexpectedly" Eases More Than ExpectedSubmitted by Tyler Durden on 09/29/2015 - 06:52 It was a tale of two markets overnight: Asia first - where all commodity hell broke loose - and then Europe (and the US), where central banks did everything they could to stabilize the already terrible sentiment.
Submitted by Tyler Durden on 09/28/2015 - 23:22 Unlike previous gold probe cases, this one will have major consequences. How do we know? Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers. As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices." Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties. UBS, as usual, choice the former.
The Money GPS:
Seymour Hersh has risked much over his decades of journalism. He is a true journalist who has been attacked, slandered, and shunned by all sides simply because he seems to resist taking any side.
When he reported on US atrocities in Vietnam, he was first attacked and denounced as a traitor or worse. In time, both the truth and Hersh were vindicated and the importance of what he did as a journalist to both inform the public and serve as a check and balance against the special interests of ruling power were recognized with a Pultizer Prize.
In 2007, when he exposed the then Bush-administration’s plans to use the Muslim Brotherhood and militant groups linked to Al Qaeda to overthrow the government of Syria – the result of which is unfolding today – the New Yorker gladly welcomed his work as a message they perceived would resonate well with liberal audiences.
Let’s discuss one of the most oversold and hated investments in today’s financial market conditions – Gold Mining equities (NYSE: GDX).
Performance over three and twelve month time frames, together with sentiment and breadth readings, all indicate that the mining shares are most likely ready for a relief rally. Furthermore, the price of the mining equities has recently tested a major support level dating all the way back to year 2000. There should be buying interest right here and that is clearly seen by sky high volume in various ETFs such as (NYSE:GDX).
On May 28, 1816, Thomas Jefferson penned a letter to his friend John Taylor deeply criticizing the use of debt to fund a government’s excessive operations:
“[T]he principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale,”
Public debt is a weapon of mass destruction that constitutes theft upon future generations.
And as Jefferson argued in the letter, every new generation has the right to be born onto this planet unencumbered by the debts racked up by their ancestors.
But that’s not the way it is anymore.
Governments, like many individuals, no longer follow the Universal Law of Prosperity: produce more than you consume.
It is business as usual in the precious metals market after a flurry last Thursday when gold rose 2 percent and was immediately met with a wall of selling. I laughed when I saw Kitco attributed to the rally to short covering, only to see that theory destroyed when open interest rose over 8,000 contracts that day. The U.S. authorities must be petrified behind the scene as they see their economy weakening noticeably — a fact that is at odds with their bogus economic releases. The U.S. stock market is also under pressure once again and more and more countries are talking about eliminating the dollar from international transactions.
A Shock Is Coming When The Great Charade Finally Ends
But this charade will continue until it ends, and when it does there will be a reset in gold and silver prices to the upside that will come as a shock to many observers. There is abundant evidence that physical supply is becoming tight in both gold and silver. There is considerable backwardation in the London market. This is something that should never happen under normal circumstances. It is just another indication of a very tight physical market.
A recent clinical trial has shown that one vegetable extract may have astounding positive effects on those with autism – broccoli extract.
The US Centers for Disease Control tells the world that there is no treatment for autism spectrum disorder (ASD). But now that one in every 68 children is showing symptoms of the disorder (a huge spike since the year 2000), you would think that a clinical trial involving a simple, natural food-based supplement would be front page news. This, however, is not the world we live in, so you likely haven’t heard about a possible solution for autism that doesn’t rely on pharmaceutical medication – until now.