Friday, October 9, 2015

China Threatens The U.S., Says Will "Not Tolerate Violations Of Its Territorial Waters"

"We will never allow any country to violate China's territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight," Foreign Ministry spokeswoman Hua Chunying told a regular news briefing."We urge the related parties not to take any provocative actions, and genuinely take a responsible stance on regional peace and stability," Hua said in response to a question about possible U.S. patrols.

Obama Weighs "Syria Retreat" As White House Ends Training Of Moderate Rebels

Last weekend we called Obama's latest failed attempt to replace Syria's president for what it is: "this is shaping up to be the most spectacular US foreign policy debacle since Vietnam." Today, less than a week later, we have confirmation that this was correct after first Bloomberg reported that "some top White House advisers and National Security Council staffers are trying to persuade President Barack Obama to scale back U.S. engagement" in Syria, and then a report from the NYT that "the Obama administration has ended the Pentagon’s $500 million program to train and equip Syrian rebels." And just like that Obama folds, again.

The Dumbest Thing You Will Read Today... Maybe Ever

Dear Americans, meet your venerable central planners:
So, according to the Fed's academic experts, the US economy is not, well, the US economy, it's not Y = C + I + G + NX, it's not the product of all goods and services created in the United States...  it's this:


Aging Prison Population Sends Health-Care Costs Soaring

In a year when the nation’s overall prison population dropped, the number of older inmates grew rapidly in 2014, continuing a trend that translates into higher federal and state prison health care spending.

The High-End Consumer Is Rolling Over: Will Apple Save The Economy From A Recession This Time?

The latest BAC credit and debit card spending data is out and it is not pretty, and not just for the mid-level consumer who, as documented previously, has been tapping out ever since April as the following Gallup consumer spending chart shows but also for the high-end.

Forget Potassium: Kazakhstan Is Now America's Top Supplier Of Uranium

There's one thing resource downturns are good for: seeing which projects and regions are the strongest in industry. And we got another big indication this week that there's one global leader when it comes to uranium mining...

Stocks Slide After Fed's Evans Takes October Off Table, Fears China Growth Weakness

It appears bad news is bad news again. Fed's Evans just played "bad cop" to any hopeful talking head (Fed's Dudley earlier predicted US rate hike this year), implicitly taking October off the table...
The market's reaction to this "way lower for longer" comment was negative.

Crude Jumps Back Above $50 As US Oil Rig Count Declines For 6th Straight Week

Following last week's biggest rig count decline in 5 months, Baker Hughes reports a smaller decline of 9 oil rigs this week to 605 - the lowest since July 2010. WTI Crude was trading just below $50 as the data printed and jumped above it on the rig count drop.

Economists Finally Admit, Odds Of A US Recession Are On The Rise

As the evidence, that the US economy is either in or near a recession, mounts (confirmed by a new cycle high in inventories-to-sales just today), it appears even the most ardent optimists are admitting the odds of a US recession are on the rise. As Bloomberg reports, for the first time in 14 months, economists year-ahead recession probability estimates rose (to their highest level in 2 years).

Why Are The IMF, The UN, The BIS And Citi All Warning That An Economic Crisis Could Be Imminent?

The warnings are getting louder.  Is anybody listening?

Happy Days Are Not Here Again

The Dow-Jones Industrial average closed over 17,000 today, for the first time since August. Do not misinterpret this recent rise. Happy Days are not here again.

Credit Suisse Stuns Investors With 50% Bigger-Than-Expected Capital Raise

Hot on the heels of Deutsche Bank's admission that all is not well, Credit Suisse's announcement last night of a major capital raise was greeted by buying pressure from investors. However, reality punched them in the face this morning as CS releasaed its investor day details and, as Bloomberg reports, is looking to raise up to CHF8 billion (almost 50% larger than Goldman Sachs investor survey suggested). Clearly, CS' has a much more massive capital shortfall than expected.

With Republicans In Disarray, And No Debt Ceiling Deal, All Eyes Turn To November 18 When The US Runs Out Of Cash

Santelli & Hunt Warn About "Dire Consequences" Of Negative Rates

As more and more Fed speakers, talking heads, and status-quo-protectors talk of, beg for, and demand negative interest rates (NIRP), the mainstream is starting to wake up to the possibility of this farce coming to America. As Lacy Hunt tells Rick Santelli in the brief clip below, "the evidence is overwhelming that QE was more of a negative than positive," and warns the consequences of NIRP are dire (and The Fed has the tools to enginner it) as "to make it effective they would effectively have to call in the currency."

Gold Jumps To 3-Week Highs On Heavy Volume

For the fourth time today, gold has been aggressively bid higher. The latest move broke recent stops and took the precious metal to 3 week highs on heavy volume...

Posted at 12:26 PM (CST) by & filed under Jim's Mailbox.

Ok, so let me get this straight:
It’s better to have 5 little Citi Banks fail, rather than 1 large one fail? The outstanding liabilities remain the same. It’s not the bank… it’s the liabilities that are at risk. They don’t go away.
CIGA Wolfgang Rech

Clinton calls for breaking up too-big-to-fail banksBy Karma Allen
Hillary Clinton unveiled a plan that aims to tackle excessive risk-taking in the financial sector and calls for breaking up too-big-to-fail banks.
The proposal, laid out Thursday, would impose a risk fee on financial firms “that are too large and too risky to manage” and require them to reorganize, downsize or break apart, the Democratic presidential hopeful said.
“I have a plan to build on the progress we’ve made under President Obama and do just that,” Clinton said in a statement. “We can’t go back to the days when Wall Street could write its own rules.”
The announcement come in advance of Tuesday’s first Democratic presidential debate.
The proposals also called for raising the fines that regulators could impose on corporations and their executives, and imposing a new tax on high-frequency trading (HFT).
Considering the USD derivative markets trade over $4T per day – I don’t think that $123B in 12 months means much to the dollar. It’s more a symbolic significance.
The control of the USD lies in the FX derivative markets – just like the metals.
Bix Weir
Only a fool doesn’t see the writing on the wall.
Like a bruise we receive, years later we can’t remember the pain. So it is with war.
Once the pain of the last one has subsided, it will begin again anew.
CIGA Wolfgang Rech
NATO Threatens To Send In Troops After Russia Stations Ground “Battalion” In SyriaSubmitted by Tyler Durden on 10/08/2015
“The force that they have deployed down there is actually quite impressive for a rapid deployment of a week or so. It is all arms, combined arms, attack aircraft, it is the attack helicopters and artillery, rocket artillery. NATO is ready and able to defend all allies, including Turkey against any threats.”
In Major Escalation, US To Sail Warships Around China’s Man-Made Islands In South PacificSubmitted by Tyler Durden on 10/08/2015
“If the US is serious about ensuring that China does not dominate these waters, then the longer it waits, the riskier its freedom-of-navigation activities will become.”
Posted at 12:05 PM (CST) by & filed under In The News.
Jim Sinclair’s Commentary
Anything China positive is US negative.
Oil M&A’s False Positives: Liam Denning Liam Denning
In a wounded market, M&A can be a healing balm. The sight of battered predators feasting on even more battered rivals warms the coldest of hearts on Wall Street. After all, if insiders have decided it is the right time to buy, then surely the worst is over.
That is one way of reading Suncor Energy’s hostile bid for compatriot Canadian Oil Sands. It just happens to be the optimistic way of reading it.
For one thing, mistiming mergers is something of a specialty in the cyclical commodities sector: Just ask Freeport McMoRan, which on Tuesday re-announced its intention to offload the oil and gas business it largely acquired when crude traded at triple-digit prices.
In Suncor’s case, the timing doesn’t look bad: Canadian Oil Sands’ stock is down by more than 50 percent in the past year, and that includes the bump it got Monday on news of the offer.
WikiLeaks Releases Text of Most Controversial Chapter of Secret TPP Deal16:10 09.10.2015(updated 16:14 09.10.2015)
The whistleblowing website WikiLeaks has released on Friday the final version of the intellectual property (IP) rights chapter of the controversial Trans-Pacific Partnership (TPP) trade agreement.
WASHINGTON (Sputnik) — The website added that the IP Chapter of the TPP “has perhaps been the most controversial chapter due to its wide-ranging effects on internet services, medicines, publishers, civil liberties and biological patents.”
“Today, 9 October, 2015 WikiLeaks releases the final negotiated text for the TPP (Trans-Pacific Partnership) Intellectual Property Rights Chapter,” WikiLeaks’ press release said.
On Monday, the successful conclusion of the TPP free trade talks was announced by trade ambassadors from the participating countries of the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
After years of secret negotiations, the TPP agreement is expected to introduce deregulated and streamlined trade between the member states.
There has been considerable opposition to the free trade deal from international organizations and lawmakers, who have criticized the TPP’s secrecy during negotiations, its apparent favoring of multinational corporations and its exclusion of BRICS countries.

The 'Real' Minimum Wage Exposed: Urban Outfitters Asks Staff To Work Weekends For Free

It appears there is a minimum wage threshold below President Obama's mandated thresholds that are "fair" and "livable." As NYPost reports, Urban Outfitters has asked workers at the company’s home office to "volunteer" for extra weekend shifts at a new fulfillment center in the town of Gap, Pennsylvania. In other words, the true minimum wage is $0 per hour. Bear in mind that if the labor market were growing as it should, in sharp contrast to how it has been presented over the past year, minimum wage laws would be the furthest from the mainstream.

One Part Of The Economy Is Booming: The Underground/Cash-Only Sector

If you make it so burdensome to operate a legit business, then you're basically giving people without big lines of credit and capital few choices but to work in the cash-only underground economy.

How Our Aversion To Change Leads Us Into Danger

The persistent claim emanating from Washington that America spreads freedom and democracy around the world has been exposed as ludicrous numerous times and in many parts of the world, but not in the US itself, and that’s what counts most. The notion that we we can grow our way out of the mess that our previous growth spurt has gotten us into, rests at best on very flimsy foundations. To shake off this all-encompassing growth ideal, however, we would need to radically change our ‘model’ of the world.

Wholesale Inventories Rise And Sales Tumble Sending Ratio To "Recession Imminent" Cycle Highs

Wholesale Inventories rose 0.1% MoM (more than expected and the most in 7 months) and Sales dropped 1.0% MoM (notably less than expected and weakest in 7 months) sending the inventory-to-sales ratio to 1.31x - new cycle highs - and flashing the brightest recession warning yet. With inventories up 4.2% YoY and Sales down 4.5% YoY, the stunning reality is the absolute dollar spread between inventories and sales has never been bigger.

Bank Of England Tells British Banks To Reveal Their Full Exposure To Glencore And Other Commodity Traders

Overnight we got confirmation that Glencore has indeed become a systemic risk from a regulatory standpoint after the FT reported that the Bank of England has asked British financial institutions to reveal their full exposure to commodity traders and falling prices of raw materials amid concerns over the impact of the oil and metals slump. Or, in other words, their exposure to Glencore, Trafigura, Vitol, Gunvor and Mecuria.

FOMC Becomes Self-Aware: Lockhart "Understands" Why People May Be "Skeptical" Of The Fed

Having reiterated all the key talking points of "data-dependence", "downside risks", "labor slack", and the economy is "improving", The Fed's Dennis Lockhart then admitted...
We wonder just what makes him "understand" the world's growing skepticism?


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