Archive - Dec 19, 2015

Having closed lower for 8 of the last 9 weeks, gold has become the momentum-chasing hedge fund community's latest target. Despite empirical data showing no relationship between higher rates and 'lower' gold, the meme continues as Managed Money added to its already record short position in gold futures this week, pushing the leveraged bets to the most extremely bearish in history.

Brazil has a new finance minister and the market is not happy. As BofAML puts it, "the focus turns now to the direction of the fiscal policy under the new FinMin, which should affect the recovery in confidence and thus growth. With mounting downside risks to growth that heavily weigh on the government’s revenues and the ongoing challenges in passing fiscal measures in Congress, tangible results over statements will now be needed to improve expectations over primary fiscal results ahead."

If this trendline fails to hold (like it did for the VLG in August), then the market may be in for a further decline. And considering the magnitude of the trendline being broken, it may not be just your “average” decline.

"The Fed didn't really drain any liquidity yesterday. They moved the IOER up to .50%, moved the RRP rate up to .25%, and the RRP volume came in at $105 billion, only $3 billion more than the day before. Where was the draining? But interest rates moved up anyway to reflect the tightening, without any fundamental change. Basically, the Fed decreed a rate tightening and the market moved rates higher.... I wonder how many economic interest rate models include "by decree" as a factor?"

In the short term, increases in interest rates can be negative for gold. But, in the medium to long term rising interest rates are positive for gold as they were in the 1970s and the 2003 to 2006 period.

I wanna wish you a Dead Bankster Christmas

What happens the next time global GDP takes a nosedive when Central Banks have already used up all of their ammunition?

"I hope Iraqis will understand that this is a reflection of things that happen in combat. But it's also a reflection of how closely we are working with the government."

One could be forgiven to hypothesize that there would be some negative response in the travel to the Middle East.  Instead as shown below, this regional hotbed continues to see a stunning record growth in passenger traffic from America.  And this unusual growth stands out as the highest of any destination.

In the wake of a Security Council resolution on Syria that failed to consider the fate of Bashar al-Assad, a belligerent Turkey is fuming mad. In comments made from Istanbul on Saturday, PM Ahmet Davutoglu said the UN's stance "lacks realistic perspective." He also said Turkish troops will remain in Iraq until Mosul is "freed" from ISIS. Translation: Turkish boots will be on Iraqi ground for the foreseeable future.

One would think that the Criminals, themselves, would not have the audacity to use the same Script (with just minor plot variations) every eight years. But here we go, again.