Archive - Oct 15, 2015 - Story

Here is what happened: a whistleblower who worked for the Federal Whistleblower Protection Program was fired for blowing the whistle on his employer: the very agency that was supposed to protect him.

As has already been discussed at length, once the economic sanctions imposed by the U.S. and the European Union on Iran begin to be lifted next year, there is going to be a surge in the already oversupplied global crude oil markets. Although the surge in crude oil markets could further worsen the global supply/demand gap, Iran could present a new source of competition on other crucial fronts too, especially in the gas markets.

The fact of the matter is that year over year retail sales at these levels only happen during recessions. It’s really that simple. Without the crutch of subprime auto loans and student loan debt being spent by pretend University of Phoenix students on iGadgets, fitbits, hookers and blow, this economy would already be in free fall. Look no further than what happened to Wal-Mart today for confirmation we are in the midst of a worldwide recession, if not depression. The only people who refuse to acknowledge recession reality are the Wall Street hucksters, looking to fleece a few more muppets before their party is over. Propaganda and lies can’t stop this recession.

"The economic numbers released yesterday can best be described with a reference to wheels falling off the bus. And it wasn’t just retail sales and PPI in the U.S. but numbers from around the world, including China. So, of course, when I woke up this morning the obvious first question to ask was, how much are equities up?"

The Fed's Bill Dudley is out on the speaking-circuit today and dropped some clangers during the Q&A. Initially proclaiming that monetary policy should be independent from politics he then admitted that "The Fed can't be completely walled off from politics." Then he spooked stocks with his comment that "actual inflation is not needed for confidence on the 2% goal," or roughly translated - we'll hike no matter what the data says...

If housing tanks, the last prop under the veneer of middle class wealth collapses. No wonder the Powers That Be are so desperate to prop up housing. But the bubbles and busts they've engineered are integral to credit/asset booms; their goal--a steady, permanent rise in prices that never falters--simply isn't possible.

Crude has fallen to fresh 2-week lows.

While less than API's huge 9.3mm barrel build reported last night, DOE reported a 7.56mm barrel inventory build - the largest in over 6 months. This is the highest crude stock level seasonally on record. Crude prices dipped on the news but rallied back to pre-data levels - though are notably holding on to the losses from the API print... even as production dropped notably week-over-week.

As the old adage goes: if it ain’t broke, don’t fix it, and as the recent bombing of a Doctors Without Borders hospital in Kunduz clearly shows, the US military presence in Afghanistan is doing wonders for stability and security which is presumably why the Obama administration has just done a 180 on troop deployment in the country.

Nothing focuses the mind more than either the lure of riches or, the loss of them. And there has been no other group caught up more in the lure for riches than: the disruption class. Disrupting is what it’s been all about over these last few years. However, there’s another disruption on the technological horizon heading right towards Silicon Valley itself, and that brewing storm is – disruption of the disrupt-ers. Now might be the perfect time to take a position in any solid company with the ability to manufacture quality “crying towels” and get them quickly to market. After all: Unicorn tears we’ve all been told are far different from most others.

We can however state with confidence that the bubble will eventually burst and that the greatest monetary policy experiment of the post WW2 era will fail – in all likelihood quite spectacularly. So we have every reason to remain long term bullish on gold and gold-related investments. Moreover, by looking closely at past lows of significance we have hopefully been able to provide a bit of a road map in case the recent low does indeed represent a major pivot point.

After IPO'ing at $16 - well below the $18-20 expected range - FDC has tumbled back from $16.41 highs (after opening at $16.31) on heavy volume to below its IPO price... $15.75 seems like the first line of defense.

Philly Fed general business activity somehow managed to rise very modestly in October from -6.0 to -4.5 but missed expectations. This the second monthly decline in a row - not seen since 2013. We say "somehow" as the underlying components were a total and utter disaster. New Orders collapsed from +9.4 to -10.6, Unfilled orders crashed to -11.7, Employment plunged from 10.2 to -1.7, and workweek evaporated from +7.0 to -7.3. Even "hope" collapsed with future expectations dropping from 44.0 to 36.7 with CapEx expectations cliff diving.

Brazil's economic recession is likely to be deeper and longer than Fitch's earlier expectations and its performance has diverged materially from those of its rating peers. Medium-term prospects also look weak compared to peers and most other large emerging markets. Fitch forecasts that Brazil's economy will contract by 3% and 1%, respectively in 2015 and 2016 before recording modest growth in 2017, with risks skewed largely to the downside.

Remember the relief? The last 4 weeks have seen Bloomberg's Consumer Comfort index rise at the fastest pace since its "Off The Lows" move from March 2009... The driver, apparently, was women whose comfort rose from 41.6 to 43.0 as men dropped from 48.2 to 47.6; and while "white" people's comfort dropped from 45.3 to 44.5, "black" people surveyed saw a huge jump from 40.3 to 45.9 in their comfort.

Correlation? Or Causation? You decide...