Archive - Nov 2015

If the government’s official statistics are to be believed the U.S. economy is moving full steam ahead. Consumer are spending, the job market is expanding, real estate has recovered, stocks are soaring and the U.S. dollar is stronger than it has been in a decade. But if you have yet to realize it, billionaire investor Eric Sprott says "it’s all a lie." The manipulation of precious metals, coupled with the supply and demand fundamentals which Sprott says will lead to shortages over the next few years as mining companies reduce output or close up shop, will leave many investors who think their gold holdings are easily convertible to physical assets with nothing more than depreciating Yellen Bucks at exactly the moment they’ll need precious metals in their possession.

It's that time of year again...

Someone decided that the exact opening of Gold futures trading on a Sunday night - ahead of a holiday week in the US - was the perfect time to liquidate over $161 million notional of 'paper' precious metals contracts... Currencies were unmoved, stocks are leaking higher and bonds lower.

Mass surveillance at home and endless military projection abroad are the twin sides of the same coin of national security, which must simply be maximized as much as possible. Conspicuously missing from President Hollande’s decisive declaration of war however, was any mention of the biggest elephant in the room: state-sponsorship. A senior Western official familiar with a large cache of intelligence obtained this summer told the Guardian that “direct dealings between Turkish officials and ranking ISIS members was now ‘undeniable.’”

"Everything is awesome," rang out as anchor after anchor explained how the stock market's "best week of the year" - after mass murder in Paris and as hawkish a Fed as most traders have known was unleashed - was just the start... and Santa Claus was on his way. However, there are a few things they forgot to mention...

#BringBackOurIgnorance

"The global dollar standard, that is now the longest-lived of these artificial monetary systems, has developed a bunch of stress cracks and is in the process of imploding right now. There is going to be before the end of this decade, most likely, another emergency meeting of a bunch of finance ministers and economists to try and hash out another world monetary system. It is just history repeating, and it is a natural consequence of a man-made, artificial manipulation of the free market."

The Fed, in its reflexive attempt to boost confidence in the economy, is not only engaging in massive policy error, but is about to unleash a recession which will promptly force it to cut rates again (to negative) and start another episode of QE.

"Those who say the United States should have intervened in 2011 to topple Assad are left having to explain either how they could have rallied U.S. public support for an Iraq-like occupation and rebuilding of Syria, or, in the absence of that, how Syria would have avoided Libya’s fate."

There’s an old adage among veteran stock traders that goes something like his, “If I told you the news before it were made public – it’s still a 50/50 bet you would guess the market’s reaction correctly.” That was when the markets had some resemblance of normalcy. Today, normalcy has been replaced with sheer lunacy as to the speculation and interpretations for where these markets go from here.

Following the attacks in Paris, gun sales are booming across the United States, not only from those who were already armed, but first time gun owners as well. "We were busy right out of the box," Russell Durling, owner of Last Resort Guns in Madison County, Alabama, told local station WAFF. "The truth of it is, when America is scared, America buys guns.”

Those who don’t understand history are doomed to repeat it, those that do understand are doomed to watch in horror while everyone else repeats it.

The latest poll following the attacks in Paris, by Fox News, shows Donald Trump moving ahead of Democrat-front-runner Hillary Clinton (in a head-to-head match up if the election were held today), but it is the turmoiling below the surface of the GOP nominations that is garnering most headlines. After a week or two of hope for GOP leadership, as Ben Carson appeared to catch up to Trump, the retired neurosurgon's lies and weakness on foreign policy ("he clearly has no idea what he's talking about," as one Iowa GOP insider noted), have sent his poll numbers reeling... and Cruz surging.

The hardest questions we are trying to reconcile here are how is that possible to see all these signs of weakness under the surface – including weak commodities, tightening credit, retrenching consumer spending – being balanced by very strong equity markets and upbeat employment picture. One of these sides has to be wrong in its assessment of the current macro environment, and seeing both of them extending well into the future appears unlikely to us.

France doesn't know who he is yet, so if you think you might have seen this guy at any point in the past several months (you know, like if you happen to have been rafting in the Mediterranean lately or maybe if you were recently hanging out with friends in Molenbeek and noticed someone making a suicide belt in the kitchen), you're encouraged to contact French intelligence immediately...