THAT"S A GREAT IDEA

Given MSM's obsession with the Donald, here's a story you won't here about from MSM in any detail if at all. Our question is all those climate-change folks backing Hillary, do they know about it?

We're no experts on it, but deep sea mining sounds like it could hold environmental disasters within its depths, something akin to the deep secrets this lady holds within her. We came across it on a specialized, somewhat obscure mining website.

U.S. leading Democratic presidential candidate, Hillary Clinton, intervened in a request from her son-in-law on behalf of a deep-sea mining firm to meet with her or other agency officials while she was secretary of state, Associated Press reported.

The 2012 emails from an investor in Florida-based deep sea mining firm Neptune Minerals Inc. were forwarded to Clinton by her son-in-law and hedge fund partner Marc Mezvinsky.
According to AP, Clinton sent the request to Thomas Nides, a vice chairman at Morgan Stanley who at the time was a deputy secretary of state.

It is not known whether the meeting took place. Clinton's campaign declined to comment.

 http://www.mining.com/hillary-clintons-emails-reveal-pro-deep-sea-miner-move-after-request-from-son-in-law

BOND KING SPEAKS

Jeffery Grundlach, as Bill Gross of Pimco fame, once called the Lebron James of bonds, doesn't walk that softly or speak with a small tongue. In the bond world, Gross' description is not that far fetched.

Here's a sample from wolfstreet.com.

“We are looking at real carnage in the junk bond market,” Jeffrey Gundlach, the bond guru who runs DoubleLine Capital, announced in a webcast on Tuesday.

He blamed the Fed. It was “unthinkable” to raise rates, with junk bonds and leveraged loans having such a hard time, he said – as they’re now dragging down his firm’s $80 billion in assets under management.

“High-yield spreads have never been this high prior to a Fed rate hike,” he said – as the junk bond market is now in a precarious situation, after seven years of ZIRP and nearly as many years of QE, which made Grundlach a ton of money. When he talks, he wants the Fed to listen. He wants the Fed to move his multi-billion-dollar bets in the right direction.

But it’s not a measly quarter-point rate hike that’s the problem. Bond yields move more than that in a single day without breaking a sweat. The problem is the risk investors piled on over the past seven years, when they still believed in the Fed’s hype that risks didn’t matter, that they should be blindly taken in large quantities without compensation, and that rates would always remain at zero. Those risks that didn’t exist are now coming home to roost.

They’re affecting the riskiest parts of the credit spectrum first: lower-rated junk bonds and leveraged loans. Grundlach presumably has plenty of them in his portfolios. More:

wolfstreet.com/2015/12/09/bond-king-gets-antsy-as-junk-bonds-which-lead-stocks-spiral-to-heck

DISTORTIONS HAPPEN

We have spent a good deal of time writing about the downside of all the new regulations and government intrusions in life in general and the financial market in particular. No matter how it's wrapped or packaged, the usual excuse is labeled as well intentioned and necessary to clear up all the greed and corruption.

 But as Scottish poet Bobby Burn noted more than 100 years ago about the best plans of mice and men, distortions, like you know what, happen. Yes, greed and corruption exist. As long as their are humans it mostly will. We of late have seen an article or two even about the risk of robot's going haywire, just another way to say distortion.

Government interference by both central banks and regulators (the latter are desperately fighting the “last crisis”, bolting the barn door long after the horse has escaped, thereby putting into place the preconditions for the next crisis) has created an ever more fragile situation in both the global economy and the financial markets. As the below charts and data show, price distortions and dislocations have been moving from one market segment to the next and they keep growing, which indicates to us that there is considerable danger that a really big dislocation will eventually happen. Read:

http://www.zerohedge.com/news/2015-12-09/ever-greater-distortions-hint-rising-crash-probabilities

COMMODITIES ANYONE?

Around the time Goldman Sachs and other big Wall Street firms are cutting back on their commodity exposure we run into this interesting story.

Tuesday was another bleak day on commodity markets. The prices of crude oil, iron ore and industrial and precious metals all declined pushing a number of commodities to fresh multi-year lows.

The world's major mining companies were trading even weaker than their wares with stock valuations of the top tier reaching decade and sometimes record lows.The commodities market is a contrarian's dream at the moment, but so far few investors that trade on these principles have taken the plunge.

In fact over the past three years 12 commodity asset managers have closed up shop in addition to the big banks closing down their commodity trading arms.This week at least one high-profile hedge fund is sticking its neck out saying the metals market have lost touch with fundamentals. 

The $2 billion Orion Mine Finance Group announced it is launching a new hedge fund in January to trade industrial and precious metals (and eventually equities) Oskar Lewnowski, the founder and chief investment officer of Orion tells Bloomberg "there are three factors driving commodities: momentum-driven financial flows, physical fundamentals and macro events"

 "For a long time, metals were driven by financial flows, be it mining-orientated banks, commodity hedge funds, CTAs [Commodity Trading Advisor] and even retail equity investors," Lewnowski said in an interview in London.

"With those guys out, we are back to fundamentals. And that’s an environment in which we can do well."

Lewnowski, which spun Orion out of his Red Kite fund in 2013 to invest in junior mining firms, is also willing to put a date on a turnaround:

"The turnaround is going to come in 2018," Lewnowski said. "The peak price cycle was in 2011 and these cycles tend to last seven years."

His top pick? Nickel.

Which is perhaps not that surprising considering it's the second worst performing commodity after iron ore this year. And perhaps the one steelmaking raw material that has decoupled from fundamentals the most.

mining.com/this-guy-is-launching-a-new-hedge-fund-to-invest-in-metals/

OVERNIGHT

Markets in Asia trend lower, according to the WSJ, for the second day running as concerns about  China's weakness persist.

Asian markets headed lower for a second day early Wednesday, with better-than-expected economic data from Japan and China failing to stem the selling.

But Chinese stocks made gains after the People’s Bank of China set the yuan reference rate—which determines the currency’s trading levels—at its weakest point against the dollar in four years.

As Chinese markets opened, the National Bureau of Statistics reported the 45th consecutive month of producer-price deflation. Factory-gate prices fell 5.9% from a year earlier, while consumer prices rose 1.5%. Both measures were slightly better than economists had expected in a Wall Street Journal poll.

After an initial selloff, mainland Chinese markets rallied, with the Shanghai Composite last up 0.7% and the smaller Shenzhen market gaining 0.3%. But Hong Kong’s Hang Seng Index fell 0.3% while the Hang Seng China Enterprises Index, a gauge of Chinese companies with listings offshore, sank 0.8%. Elsewhere in Asia, Japan’s Nikkei Stock Average extended declines into a second day, down 0.8% after a brief rally sparked by machinery orders data that sharply beat expectations.

Australia’s S&P/ASX 200 slipped 0.1% after consumer confidence for December deteriorated, while South Korea’s Kospi was flat. The U.S. dollar index, which tracks the greenback against a basket of currencies, was last down 0.1% at 98.32. Gold held steady, with bullion last up 0.2% at $1,076.90.

Some economists said the yuan’s depreciation below levels in August reflected underlying weakness in China’s economy.

Reuters reported falling Chinese factory producer prices continuing its trend and noted the ongoing weakness in commodities as shown in The Thomson Reuters Core Commodity index (TRJCB) Tuesday trading "at its lowest level since November 2002." 

WHAT YOU WISH FOR

Up to now there's been an almost celebratory mood in markets about the once weakening but apparently now tanking energy sector.

It was going to be good for everyone, cheaper gas pump prices, more greenbacks in consumer pockets and all the other perks the media talking heads sounded off  about. But a note of caution might be in store here as low becomes too low and we get the unexpected and unintended.

The collapse of the housing bubble sent the world spiraling into recession. The collapse of the energy and commodity bubble threatens to be just as damaging. That few are willing to even 
use the term "bubble" with regard to the boom and bust in the price of oil, copper, iron ore, and other materials tells how early we still are in the painful unwind phase. 

As with housing, there was a fundamental reason for these prices to soar. China has been on a historic commodities binge as it doubled the size of its economy in recent years to become one of the world's largest. Even so, those fundamentals begat—as they have so often throughout human history—a feeding frenzy.

That frenzy of financing, mining, fracking and dealmaking exacerbated the boom and now, the bust as China's growth and appetite for such raw materials has slowed dramatically. The collapse of this apparatus is already proving deeply painful for the world economy.

Be careful. What you wish or hope for might be getting ready to intrude.

 
cnbc.com/2015/12/08/the-real-danger-of-the-oil-collapse. 

OTHER VOICES

Mark Hulbert's been around awhile, tracking performance of newsletter writers. Here's an interesting piece from MarketWatch today about what the 2016 stock market might do.

It notes some of the pitfalls some investors fall prey to, past is not prologue, but more likely, to use a Zen idea, the market in any given year is what it is.

CHAPEL HILL, N.C. (MarketWatch) — There’s a 66.1% chance that the U.S. stock market will rise in 2016.

If you’re like most investors, you’re encouraged by those odds. After all, the current bull market can’t last forever, and, depending on how you count it, it’s already one of the longest in U.S. stock market history.

In fact, the odds of the stock market rising next year would be the same even if we currently were in a bear market. That’s because the market’s odds of rising in a given year have nothing to do with how it does in prior years. Historically, those odds have been very close to two out of three.

Investors who find this result hard to fathom are guilty of what statisticians call the “gambler’s fallacy.” A common instance of this fallacy comes when we think that, after a coin comes up heads in six consecutive coin flips, there are better-than-even odds that the next flip will be tails. A coin, of course, doesn’t remember whether its previous flip came out heads or tails, so the odds are 50-50.

The situation that applies to the stock market is remarkably similar. More;

marketwatch.com/story/here-are-the-odds-that-us-stocks-will-rise-in-2016-2015-12-08

MORE ON THE DONALD

We continue to stand by our assertions that MSM hates Donald Trump for obvious reasons: Like the Internet, he's their current worst nightmare.

You can do many things in this nation, borrow my car, drink my liquor from an old fruit jar and steal my significant other, but don't whatever you do try to question MSM. The cover picture from this newspaper, media rag or otherwise, says it all.

The higher echelons of MSM in normal times,whatever and whenever that is, might look down on such scribes but they will gladly let them front run, do the door-to-door nastiness when it comes to assassinations.That way they keep their long-time filthy hands seemingly clean.

zerohedge.com/news/2015-12-08/were-war-get-it-through-your-head-trump-doubles-down-during-combative-follow-interview

OUR VIEW

 
We don't like to get into politics specifically because both of these bankrupt entities, left and right, have nothing substantially to offer, but this MSM war against The Donald should tell you everything you want to ever know about MSM.

Our only interest here is economic. Make no mistake: Economics is politics and politics is economics. And there's much riding on this one if you make any pretense whatsoever of giving a big banjo player's butt about your liberty and freedom and economic future.

CNN Money is running a story today with the headline "Donald Trump gets cut off "Morning Joe." First of all, getting cut off from CNN is probably one of the highest distinctions or commendations one could ever achieve in this dimension this time around.

The headline itself is deceiving, a traditional forte of MSM. But we'll let you decide. The trouble MSM has with Trump and anyone else who might be like him is they detest on the one hand and can't accept on the other he simply is saying much that resonates with people who are hardly bigots, hateful or stupid.

A recent example is one so-called journalist at The Fiscal Times wrote that nearly 68 percent of current Trump supporters are not college educated and only around 16 percent, young or old, have been officially baptized in those academic propaganda cauldrons. The essence of the article was to convince these people this guy can't win so why waste your time.

Forget the numbers here; they don't matter. It's the intent. Intent is all with MSM and with MSM all is intent.

Here's another example from the CNN piece. Trump is known among the political press for ignoring questions and instead using them as a springboard.  Apparently, the poor soul who penned this is either woefully ignorant of political history or one of the useful idiots crowd. His sentence is the classic Webster's definition of politicians and bureaucrats the globe over. 

Why single Trump out for it? The simple answer is: Trump is hitting a major nerve, one these MSM elitists who want to interpret and dictate what's good for the rest of us hatefully detest. Some lady we read about daily with a long track record of avoiding answers and jumping onto that springboard, has MSM cut her off yet? 

Know what you have here. That's your only chance. We don't know Trump, never met Trump, don't support Trump. The truth is not so much what he has been saying, offensive or otherwise. Trump presents MSM and the current establishment with three biggies, three major problems, they absolutely abhor. He's unpredictable, uncontrollable and, with a little good fortune for all the rest of us, probably un-buyable.  

The threat is palpable. And if it gets any worse you'll see MSM with an even bigger problem: Trying to figure out which leg their crap is running down the faster. You can tell how threatened these folks are by how many stories on the man they lead with daily. Ones like he wants to kill the Internet or he made millions in Muslim countries.

This goes way beyond character assassination. That's our view. We hope you know yours.

money.cnn.com/2015/12/08/media/donald-trump-morning-joe 

KISS OF DEATH?

CNBC is reporting an interview with U.S. Energy Secretary Ernst Moniz that despite all the bleakness, U.S. Energy production is just fine.

Is it the kiss of death or just another government official sent out to sooth for now the ruffled feathers of an industry feeling the pain of falling prices and too much regulation from an administration that's pushed regulation and caused much pain?

Despite the ongoing weekly closures of U.S. oil rigs, spending cuts and the cancellation of drilling projects in the U.S. shale oil industry amid slumping oil prices, the U.S. energy secretary told CNBC that the country's oil production will recover.

"Oil production in the U.S. has not dramatically dropped, it has gone down a little bit but it's up by four million barrels a day from a few years ago," U.S. Energy Secretary Ernest Moniz told CNBC.

"Our Energy Information Administration (EIA) expects that the average production this year will still be above 9 million barrels a day so the drop-off is not viewed as precipitous. Presumably, the expectations are over time that we'll see a slow reversal of that drop-off and that production will be restored."

"We are certainly not resource limited," Moniz added, noting as well that the country's natural gas production was continuing to rise despite lower gas prices. He said the country's first liquefied natural gas (LNG) exports would come onto the market early next year. More:

.cnbc.com/2015/12/08/us-shale-oil-industry-will-recover-us-energy-sec.