• GoldCore
    08/22/2014 - 05:07
    The former powerful mafia boss, turned motivational speaker and author, Michael Franzese, warned on CNBC that stocks are a bubble, Wall Street is crooked and advised people to own physical gold...

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Stocks Stumble On J-Hole But Close Best Week In 4 Months

US equity markets were led by the stodgy old low-beta Dow this week - not the high-flying muppetry of the Russell or Nasdaq - as stocks enjoyed the best week in 4 months amidst escalation of geopolitical time-bombs in Israel, Iraq, and Ukraine. Dow and Trannies gained 2% by the close as today's disappointment in Yellen and Draghi took the exuberant shine off an otherwise bottom-left-to-top-right Birinyi ruler-based market. The USDollar gained 1.1% on the week - its best week since November - closing at one-year highs. Gold was slapped almost 2% lower (worst week in almost 3 months) as did WTI (back at $1280 and $93.50 respectively). Copper surged 3.2% on the week (2nd best week in a year) on China restocking chatter. Treasuries were a mixed bag with dramatic flattening on the week (30Y +2bps, 5Y +12bps) to 2009 flat. Credit markets cratered on the day - ignoring equity's relative shrug.



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California Droughts: Then And Now

With Lake Mead water levels at record lows, the obstinate drought in California is showing no signs of letting up, and is now being compared to the last major drought which took place during 1976 and 1977. However, the current drought may get much trickier if we don’t see a sharp reversal in rainfall patterns soon, as 'there is a conflict brewing...'



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Russia Releases Video Of Massive Army Drill To "Contain Armed Conflict In Imaginary State"; Schedules 2 More

Two weeks ago today, on Friday, August 8, the "market" seemingly desperate for any excuse to soar, did just that when Russia, tongue-in-cheek, announced that a Russian military drill, which everyone knew in advance would end that day, and which "worried the US department of state" finished. So by that logic the announcement of a new, and even more massive, military drill by Russia should send stocks crashing, right? We are joking of course: there is no news in this world that could possibly send stocks lower as good news is great but bad news only means even more intervention of various central banks, however Russia did indeedannounce that it will take part in counter- terrorism exercise called Peace Mission in China. All this is happening as Russia is currently taking part in a third exercise, called Interaction-2014, located in Kazakhstan with members of the Collective Security Treaty Organization. The purpose of this particular drill: "seek to contain armed conflict in imaginary state."



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Does Obama Need An Ice Bucket Challenge?

Presented with no comment...



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Mario Draghi Takes The Wind Out Of Citi's "QE In December" Sails

With Yellen's speech a bit of a letdown for the doves - she did not go full-dovish - markets anxiously await Mario Draghi to promise whetever for ever and ever... While financial markets don’t expect bombshells, his speech is an opportunity to underscore that ECB policy will stay looser for longer than that of the Fed and the Bank of England.

DRAGHI SAYS HE'S 'CONFIDENT' JUNE STIMULUS WILL BOOST DEMAND, SEES 'REAL RISK' MONETARY POLICY LOSES EFFECTIVENESS



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More Scaremongery: Inhofe Warns ISIS "Developing A Method To Blow Up A Major US City"

Last night it was SecDef Chuck Hagel who warned ISIS was a bigger threat to America than 9/11 and primed the narrative for the next round of defense-spending (and this deficit-boosting, QE-enabling money printing). Today it is Senate Armed Services Committee member Jim Inhofe who told Fox that "we're in the most dangerous position we've ever been in as a nation." While that seems a little bit of stretch (oh and hasn't the Senator seen stocks?) he adds - rather ominously, "they're crazy out there and they're rapidly developing a method of blowing up a major U.S. city and people just can't believe that's happening." But then again, when have we ever needed to 'believe' anything anyway (especially without YouTube clips to prove it).



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As South Africa Reels From Unexpected Bailout, One Bank Has A Modest Proposal: Give Us Your Gold

In a historic first, three days ago, South Africa's Rand Merchant Bank, a division of FirstRand Bank Limited, announced it would issue the FirstRand Gold Bond, or a bond denominated in South African Krugerrand gold coins. In other words, for the first time "holding" gold will pay a dividend (or in this case, interest). Sound odd? Maybe because it is.



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Why The Fed Is Being Forced To End QE

While the Federal Reserve presents itself as free to do whatever it pleases whenever it pleases, the reality is the Fed's own policies are constraining its choices. The Fed is being forced to end its bond-buying, cutting off the "free money for financiers" that has sustained a frothy stock market.



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Pentagon Demands Russia Remove Convoy "Immediately" As NYT Reports Russians Firing Artillery In Ukraine

UPDATE: Official Russian denial - no YouTube - *CHURKIN: NO PROOF OF RUSSIAN ARTILLERY IN UKRAINE

The Russian military has moved artillery units manned by Russian personnel inside Ukrainian territory in recent days and is using them to fire at Ukrainian forces, New York Times reported, citing NATO officials. The Russian move, NYTimes reports, represents a significant escalation of the Kremlin’s involvement in the fighting there and comes as a convoy of Russian trucks with humanitarian provisions has crossed into Ukrainian territory without Kiev’s permission. The US is now getting involved, as WSJ reports,

  • Pentagon calls on Russia to 'Remove Vehicles Immediately' From Ukraine
  • Kirby says "very concerned" by Russian convoy in Ukraine.

Ukrainian Security Service chief Valentyn Nalyvaichenko said the move amounted to a "direct invasion," and The Pentagon has warned "failure to [remove its vehicles] will result in further costs and isolation."



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Wall Street's Take On Jackson Hole: "Yellen Was Not Dovish Enough"

Confused by what Janet Yellen said? As it turns out, so is everyone else, where the prevailing sentiment across the sell-side analysts was that Yellen was not dovish enough. Then again, with expectations bordering on Yellen giving the "BTFATH" green light, there is no way she was not going to disappoint...



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Treasury Curve Collapses To Flattest Since Jan 2009

Bye bye NIM... The spread between 30Y and 5Y Treasury yields has collapsed to 151bps, its lowest since January 2009. It seems expectations for the exuberance of the business cycle expansion are a little underwhelming. This is half the Treasury curves peak steepness (hope) seen at the end of 2010...



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Is Portugal Next In Line For Wealth Confiscation?

The pattern should be seared in your memory by now. If you fail to recognize it, you could be struck with a huge financial blow. It’s a pattern that has played out over and over throughout history: a government gets into financial trouble, then denies there’s a problem, which is followed by a surprise wealth grab. That’s exactly what happened when bank deposits in Spain and Cyprus were raided. We’ve also seen retirement savings confiscated in some form in Poland, Portugal, and Hungary. Capital controls have been imposed in Cyprus and Iceland. Of course these aren’t the only examples of blatant government thievery. These examples are just within Europe and just within recent years. They can and will happen anywhere.



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Russia Explains Why It Rushed Entry Of Humanitarian Convoy

In a nearly carbon-copy replica of last Friday when tensions escalated then de-escalated on rumors that Ukraine had attacked a Russian military convoy, today's Yellen speech has been completely upstaged by ongoing developments out of Ukraine, where Kiev condemned the entry of Russian humanitarian convoy trucks (subsequently adding it no longer knows where they are), following Russia's announcement it could wait no longer to provide aid to the citizens of the Donetsk People's Republic. And while NATO promptly echoed Ukraine' position once again as it did last Friday, now it is Russia's turn to explain why it rushed to enter the country, seemingly without express preapproval by the Ukraine government.



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Stocks Slide As NATO 'Condemns" Russian Invasion, Warns Of "Alarming Build-Up" Of Forces

The last time NATO warned about (and threatened) Russian forces on Ukraine, stocks freefell.We will see if that happens this time:

  • *NATO CONDEMNS ENTRY OF RUSSIAN CONVOY INTO UKRAINE
  • *NATO HAS SEEN TRANSFERS OF LARGE QUANTITIES OF ADVANCED WEAPONS
  • *NATO SEES `ALARMING BUILD-UP' OF RUSSIAN FORCES NEAR UKRAINE
  • *NATO'S RASMUSSEN URGES RUSSIA TO STOP DESTABILIZING UKRAINE

As Former US Ambassador to Ukraine Bill Taylor warns "markets should be concerned, this is an actual invasion... and likely means war."



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The Market Reacts To (Then Reads) Janet Yellen's Speech

Out of the gate - based on the fact the word "slack" was present and the word "bubble" was not, stocks ramped higher as J-Yell's J-Hole speech hit. Bond yields surged (led by 5Y) and the USDollar also surged (as gold shrugged). However, once the machines were done, humans reacted to the fact that this was not the "full dovish" speech that was 'priced in' and have started to sell stocks back... but then again - we always have Draghi later to save Friday...



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