One month ago, shortly after we reported that "Silver Coin Sales At US Mint Soar To Highest In Two Years" we learned that the "US Mint Sells Out Of Silver Eagles Following "Tremendous" Demand." That, however, did not prevent the mint from selling just about 5 million ounces in the period since the announcement, and as Reuters reported last week, "Strong investor demand lifted American Eagle Silver Bullion coin sales to a record for the second straight year, the U.S. Mint said on Tuesday." For those confused, it is clear that another year of record demand for physical silver explains why the price of silver is down 12.5% in 2014 after being down 36% last year. Why? Because as we said a month ago, "when it comes to precious metals, thanks to the BIS and the central banks, Paper beats Rock every time."
In recent years Geoffrey Raymond's annotating opportunities have slowed to a trickle courtesy of every central bank going all-in on some $11 trillion in QE (and rising fast) to create the artificial impression that the financial system is stable (because in some parallel universe 6 years of endless bailouts somehow is equivalent to stability and is expected to "boost confidence"), although if recent market volatility is any indication, he may soon be making a repeat appearance, if only in front of energy trading desks at first. And while we await Raymond to once again make mainstream media headlines, he has a special holiday gift idea for all those Zero Hedgers who have not yet parlayed their trillions (if Joe LaVorgna is correct) in savings from plunging crude prices into even more consumerism. Presenting "Existential Rage in the Workplace" from Geoffrey Raymond.
Within the last 90 days there has been more convoluted messaging coming from the financial media, the main stream, as well as academia than we can remember. The more one looks or tries to find relevant, useful, actionable insights – the more they get conjecture. Personally we’ll take our chances with not gambling at all or looking to any of the so-called “experts” for clues. It keeps becoming abundantly more clear by the day: without the “Chair” behind the curtain. OZ is more attainable than following the road to financial freedom these people want to point out.
Following Friday's US weakness and UAE's hint that $40 oil is coming next, the crude carnage continues as Middle East markets are crashing. As WSJ reports, the bearish direction of oil prices again spooked investors in Dubai where the DFM General Index finished down 7.6%, extending Thursday’s 7.4% rout. The bloodbath extended across the entire region with Abu Dhabi down 3.6%, Qatar slid 5.9%, Kuwait fell 2.9%, and Saudi Arabia’s market, the largest bourse in the region, retreated 3.3%. As one analyst warned, "the severity of this decline could very well be explained by investors covering margin calls as leverage was used on the way up over the past year."
While the market, and America's media, was focusing over the passage of the Cromnibus, and whether Wall Street would dump a few hundred trillion in derivatives on the laps of US taxpayers once again (it did), quietly and unanimously both houses passed The Ukraine Freedom Support Act of 2014, which authorizes providing lethal assistance to Ukraine’s military as well as sweeping sanctions on Russia’s energy sector. And as has happened for the entire duration of the second Cold War, any action by the US was promptly met with a just as provocative reaction by Russia. In this case, a leftist member of the Russian Duma said the US Senate’s decision to arm the Kiev regime should prompt ‘adequate measures’ from Russia, such as deploying military force on Ukrainian territory before the threat becomes too high. "It is quite possible that we should return to the decision by our Upper House and give the Russian president an opportunity to use military force on Ukrainian territory preemptively. We should not wait until Ukraine is armed and becomes really dangerous."
Who said economics can’t be fun?! How is it not absolutely brilliant that in the face of a collapsing shale oil industry – or at least, for the moment, of its financing model -, and the worst week for the Dow since 2011, the Thomson Reuters/UofMichigan consumer sentiment index shows American consumers are more optimistic than they’ve been in 8 years, and that “more consumers volunteered good news than bad news than in any month since 1984?? 1984! How does one trump that as a contrarian signal? And that I don’t mean to sound funny: that is serious.
Following the passage of the Crominbus on Thursday night in a last minute "nailbiter" when the Federal spending bill got just one vote more than the required majority, it was off to the Senate. And late last night, proving that the Senate can work on weekends when a piece of Citigroup-penned legislation is on the table, in a 56-40 vote (21 democrats, 18 republicans, 1 independent voting No), the Senate joined the House in voting itself $1.1 trillion for the next 9 months, with the bill now heading for the final signature: Obama's. There is some argument whether the executive will join the legislative in confirming the US government is now (and always has been) merely a pupet of Wall Street, although we expect all it will take Jamie Dimon is just one more phone call of "encouragement" to Obama to make sure Wall Street's will is done in the White House.
- JAPAN RULING LDP WINS 275-306 SEATS: NHK EXIT POLL
- JUNIOR COALITION PARTNER KOMEITO WINS 31-36 SEATS: NHK POLL
- JAPAN OPPOSITION DPJ WINS 61-87 SEATS: NHK EXIT POLL
- JAPAN INNOVATION PARTY WINS 30-48 SEATS: NHK EXIT POLL
- JAPAN COMMUNIST PARTY WINS 18-24 SEATS: NHK EXIT POLL
- JAPAN RULING COALITION SET TO WIN 2/3 MAJORITY, NHK EXIT POLL
Fool me once, shame on you. Fool me twice, I deserve to lose.
Not a day passes without pundits on either side of the debate, eager to make their case that the acute, nearly 50% plunge in the price of crude, swear up and down their preferred economic ideology of choice that said plunge is [bullish|bearish] for the economy. The reality is that the true impact of the great oil crash of 2014 will not be revealed for at least several months, however for those who can't afford to wait, or simply lack the patience, here is perhaps the most comprehensive view of the pros and cons of what has now been dubbed a "textbook macroeconomic shock" by Deutsche Bank.
One sign would be for non-energy junk bonds to begin dropping in price. That would mean large holders are exiting from all junk bonds, not just those companies affected by low oil prices.
Another sign would be sudden drops in share prices for banks or insurance companies that hold small amounts of energy-related bonds or bank loans, a clue that some market participants think they have derivative exposure.
A third sign to look for would be the rumors or news that the big, investment-grade energy companies are having trouble renewing their Commercial Paper, bank loans or maturing bonds (the Exxon-Mobils and Shells of the world).
... it remains to be seen if market bubblemania on the back of central bank multiple expanion around the world can thrive, especially as corporate cash flow (and revenue, and GAAP EPS) growth trickles to a halt, coupled with an energy and junk bond market implosion, but when it comes to Barron's covers top-ticking the market, it is never different.
One thing is certain about the ensuing “race to the bottom”. Japan’s retirement colony will end up with the hindmost. And they will surely burn professors Krugman and Summers in effigy—-even if driftwood is the only fuel they have left.
It should come as no surprise that Republicans would be willing to vote for a bill that seeks to indemnify Wall Street from future failure. After all, Wall Street's proximity to the GOP, and vice versa, is hardly a contentious issue. And yet, it was "only" 162 republicans who voted for the Cromnibus - some 67 voted against. Which means that whipping the 57 democrats who also voted for the Bill to get the crucial 218 passing votes was far more critical to assure passage of the swaps push out provision. What exactly motivated those 57 Democrats to break ranks with the rest of their party - the 139 democrats voted against the spending bill - and to be not only on the receiving end of Elizabeth Warren's ire, but also accountable for dumping a few hundred trillions of derivatives into the laps of US taxpayers. The answer, what else: money.
Thousands Of Protesters Swarm Washington, NYC: "Don't Expect To See Obama Here, Black Issues Don't Matter To Him"Submitted by Tyler Durden on 12/13/2014 - 13:12
Those planning on visiting (or merely driving around) Washington or New York City today may want to consider a plan B. As Reuters reports, "thousands of demonstrators were expected in Washington and New York on Saturday to protest the killings of unarmed black men by U.S. police and to urge Congress to protect citizens. Organizers said the protests would be among the largest over police tactics and the killings of black males by officers in New York, Cleveland and Ferguson, Missouri. “It’s open season on black people now,” New York march co-organizer Umaara Elliott said in a statement. “So we demand that action be taken at every level of government to ensure that these racist killings by the police cease.”