The Hard Stuff

The onslaught against gold and silver is like that of propaganda, it never ends

It's interesting that propaganda and polling both start with the same letter of the alphabet. And so does pissed-off as in a great swath of the American public in what is setting up to be one of  this nation's dirtiest and perhaps bloodiest presidential election campaigns in history.

So what we have here is the three legged stool, polls such as many of those from MSM spewing out propaganda in the form of loaded numbers and a pissed-off large number of Americans who know what's happening. Take those recent polls that show Clinton ahead in swing states after getting a pass on her email scandals that everyone except her most dyed-in-corruption supporters know something rotten happened.

With gold and silver the attacks started up again right after Brexit. Both precious metals rallied, the fiat money merchants' worse nightmare. Venezuela is a good example of fiat money gone awry. To fiat money merchants and their shills in MSM the only real bull market is paper assets. Over the weekend a columnist for the WSJ wrote a pathetic piece about why bonds with negative yields were still a good buy.

He cited the obligatory Harvard study. (How much better off would this world be without Harvard?)
The study shows almost once every six years bonds since 1800 have negative real yields. His point being that today's bonds in the U.S. have "marginally positive" income and thus buyers shouldn't feel cheated or long for the so-called good old days.

He then as most MSM central bank apologists do cites bogus inflation indicators the Fed has been manipulating to their and the government's advantage for years to make his case: Bonds are still the safest way to protect against the inherent risk of stocks. Fiat money is the hallmark of Wall Street and central bankers. MSM serves their purpose quite well, being the useful idiots they are.

Given this market run-up, add to your gold and silver for the chaos that's en route. We have no associations with any gold and silver firms and we have no positions in the futures market. You want to take physical possession of the hard stuff. There is more than one way to spell insurance.

Without pushing innocents into bonds, this debt charade won't go on much longer. When the fat lady clears her throat--no apologies to the PC crowd here--it will be much too late.

In Case

In  case you didn't notice, gong int this past weekend MSM fell all over itself trying to convince us how well the economy is now doing.

Story headlines like, "Consumers Give Boost to Economy," in the WSJ to many others gives you a clue t the straw-clutching going today with all  the global turmoil. Here's an opening blurb from that piece: If here's any lingering worries about tab economy, consumers just put that to rest." The author goes on to cite retail sales for June jumped to 0.6% from 09.2% in May and the Labor Department reporting prices picked up in June.

He then cites near record low mortgage rates , new stock market highs and gasoline prices trending lower. We don't know where he lives but gasoline prices in our area have been trending higher for the past several weeks. Moreover, real estate prices and rents are higher than  most government spy satellites.

Now the stock market is another interesting case, as was pointed out in Barron's this weekend. The Nasdaq, the Dow transports and the Russell 2000 are not confirming the new highs. Also, corporate earnings seem to be petering out and the narrowness the the new records are more concerning, "...take a few hundred stocks out of the equation, the broad market hasn't surpassed the highs." There is another concern, valuation.

On the global front China remains a mystery, as enigmatic as ever, and that's if anyone can believe or trust any of the data coming out of that country. A cooling property market, a less than robust service sector, official joblessness rates that are less reliable than a politician's election promises and rising government spending versus falling private sector investment all hand over this market. And those are the things someone might know about.The unknowns are anyone's guess.

The bulls will tell you after a long trending sideways market, new highs bode well for further upside.
We like a real bull market as well as the next guy. And when the next real one comes around, we hope to make some decent profits. Meanwhile, this is a trading vehicle. sell some covered calls and buy some cheap puts on further upside.

Overnight

China was really the big news overnight as its economy grew 6.7% on-year in the April-June quarter. Economists had predicted 6.6% growth, so the minor higher blip was welcomed by many and no doubt will be twisted by others into positive spin. Reuters reported: Retail sales for June in China were up 10.6 percent on-year, industrial output for June grew 6.2 percent on-year, while fixed asset investment for the January-June period was up 9 percent on-year.

The news helped push Asian shares higher Friday with some other help from the U.S. where markets recorded another record close. The Nikkei 225 was up slightly, 0.82%; Australia's ASX 200 rose 0.64%; the South Korean Kospi rallied 0.6%; the Hang Send Index was up 0.29%. In China the Shanghai Composite added 0.18% with the Shenzhen Composite flat at 2,044.86. The broader Topix and the JPX-Nikkei Index 400 each gained 0.9 percent to 1,322.75 and 11,886.93.


 Currencies captured some attention when the Bank of England voted to hold its interest rate stready for now at 0.5% and not to change its current QE program. The UK pound traded at $1.34126 to the dollar with the dollar trading at 96.13 against a basket of currencies. the Japanese yen weakened against the buck, 105.89, as opposed to its stringer levels last week.

Find Out Why

The above chart is from DoubleLine, the firm run by billionaire bond guru Jeffery Gundlach. He calls it the "chart of the quarter."  To find out why, here is the link to the article. We recently talked about taking trades few want to take. We also talked about commodities, the area nobody wants to be in today.  Ask yourself this quite difficult question: What's the trade everyone seems to be wanting to take today? If you don't know the answer, you're probably already in it. If you are, at some point you're going to need more than the wind at your back.

advisorperspectives.com/articles/2016/07/13/gundlach-the-once-in-a-career-moment-in-the-bond-market

Overnight

The Wall Street Journal reported overnight, A week-long rally across Asian stocks hit the brakes Thursday, with investors waiting to see whether the Bank of England’s interest-rate decision would make or break further equity gains.

Japan’s Nikkei Stock Average remained the biggest outperformer in the region, gaining 0.4% to add to its 7.7% ascent this week. Investors’ hopes for fiscal-stimulus policies helped set the benchmark on track to scoring its best weekly performance so far this year.

The Nikkei 225  hit 16,355.30 as the average remained the biggest winner in the region, gaining 0.4% to add to its 7.7% ascent this week.The Japanese yen gained against the dollar, while the British pound weakened. The former is up by 0.4% at 104.28 per dollar, while the latter is down by 0.4% at 1.3192 reversing a trend where the yen weakened against the greenback, while the pound was stronger.

• Dow: 18,372.12 (+0.1%)
• S&P 500: 2,152.43 (+0.0%)
• Nasdaq: 5,005.73  (-0.3%)
• WTI crude oil: $45.15 (-3.5%)
• 10-year Treasury yield: 1.473 (-2.7%) 

Meanwhile, the rest of Asia traded like this: Australia’s S&P/ASX 200 was up 0.2%, Korea’s Kospi was down 0.2% and Hong Kong’s Hang Seng Index edged down 0.1%. China’s Shanghai Composite Index lost 0.3%, and Singapore’s Straits Times Index was off 0.1%. Gold held steady early Thursday, after rising as much as 1 percent in the previous session, buoyed by expectations that central banks could cut interest rates. 

Spot gold had inched up 0.2 percent at $1,345.46 per ounce by 0109 GMT. It rose about 0.9 percent on Tuesday, closing at $1,342.45, after touching a session-high of $1,345.20.
U.S. gold climbed 0.3 percent at $1,347 an ounce.

The Big Camel's Spine

Why anyone was surprised at the recent outburst by Supreme Court Justice Ruth Bader Ginsberg is beyond us. Most people knew what they were getting when she was nominated, a left-wing ideologue who would bring her ideology to the court. And she has.

That she was ever confirmed reveals the lack courage of the Republicans who did what they always do, compromised away any principles they are famous for pretending to have. Republicans wonder why Trump gained such traction. Ruth Bader Ginsberg is one reason. And her outrage brings up another Trump point, judges are hardly impartial. Her ranting only buttresses his early point about a certain judge recusing himself. It's has everything to do with politics and nothing to to do with race.

The comment of another current Supreme Court Justice a few years ago at Berkeley is further proof judges and their decisions are affected by their ethnicity. This is yet another deep divisive issue in this nation. But not just here, around the globe. People get it. Right now in this country and elsewhere in Europe there are Muslims who want only to be judged by Shea law. We presume that means no blacks, whites or Hispanics. Sounds like there's some ethnicity in there. One could postulate that when she was appointed there were Americans who wanted to take her husband's advice and move to New Zealand. But we doubt if that thought ever crossed her mind.

Ruth Bader Ginsberg should be ashamed of herself. Her obvious prejudicial outburst did more to sully peoples' respect for the law than 100 unjustified cop shootings of citizens. And we all know over the years there's been many more than that. And the victims were hardly all black.

This is just another thorn in the sides of the elites running this country. One more blatant straw placed on the the big camel's already sagging spine. That's our view. We hope you know yours, though we most likely will be censored for it by Google, as we have in the past. It's a small world after all, but hardly one, you need to be aware of, with genuine free speech.

Overnight

Overnight

This chart from WSJ tells the story as the  DJIA pushed to a record Tuesday, surpassing their May 2015 milestone and ending the longest stretch without a record since the period from October 2007 to March 2013. The Dow was up 120.74 points, or 0.7%, to 18347.67 to climb past its previous closing record of 18312.39 set May 19, 2015.

Overseas, the Nikkei hit a one month high Wednesday as investors continue to look for more monetary stimulus from the BoJ. The Nikkei edged 1.0% higher to 16,444.25, highlighting its gain since the election Sunday to 7.5%, with today's rally to a one month high. Tuesday Prime Minister Abe met with form Federal Reserve Chairman Ben "Helicopter" Bernanke amid speculation that they would discuss that topic in an attempt to put an end to the deflation that's been troubling the Japanese economy for longer than most can recall.Further easing would increase liquidity that would be expected to find its way into the equity markets.

Elsewhere, the WSJ reported: Australia’s S&P/ASX 200 was up 0.3%, Korea’s Kospi gained 0.6% and Hong Kong’s Hang Seng Index added 0.4%. China’s Shanghai Composite Index rose 0.4%. The gains follow strong performance on Wall Street overnight, with the Dow Jones Industrial Average closing 0.7% higher to a fresh record high. 

Chinese shares were also up, despite a ruling from an international court against the country’s claims over the South China Sea. Though China rejected the ruling, it struck a conciliatory tone to say that it was open to talks with its neighbors. That, along with investors exiting positions, led to declines in defense-related stocks on Wednesday.

Meanwhile, China’s yuan was trading slightly weaker against the U.S. dollar ahead of data this week, ranging from second-quarter economic and credit growth figures, to June property and industrial-production numbers. 

cafe4now.blogspot.com

Tossing Some Crums

If you want to know how scared the elites are here's a story from Business Insider about Jamie Dimon, the big guy at Chase Bank, wanting to make America great again businessinsider.com/jpmorgan-raising-wages-for-hourly-workers-2016-7?

What you know about this is Dimon and his kind wouldn't be making any concessions, nada, unless they felt pushed to the mat. You can also bet Brexit had something to do with these-tossing-a-few-crumbs to the rabble decisions.

JPMorgan CEO Jamie Dimon wants to make America great again.

In an op-ed article published in The New York Times on Tuesday, Dimon outlined a plan for the firm to raise wages for overtime-eligible employees over the next three years. The firm's minimum wage for its 18,000 hourly employees in the US will move from $10.15 an hour to a range of $12 to $16.50 depending on market and location. It's a move similar to that announced by Starbucks on Monday. 

In his article, Dimon wrote that a pay increase was "the right thing to do."
"Wages for many Americans have gone nowhere for too long," he continued. "Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth." 

Banks, especially big ones like Mr. Dimon's, have been printing a lot of money for a long time and their industry is noted for low balling their employees when it comes to wages.  And for those who suggest at least he's doing something, this is an industry that charges you in many ways for trying to withdraw your own money. This is an industry that wrote the manual on ways to skim money from their customers via so-called fees.

A business associate recently related this story. He had to go into his bank, one of the largest and where he's had his account for years. He wanted to order more checks while he was there for his business, thinking it was efficient and convenient. He was surprised when the teller told him he would have to go the loan side of the branch and order them,but there would be a fee. If he just went home and did it online there would not be a fee for ordering them. This was a fee for just ordering them, on top the.normal fee he gets charged for his checks.

The French philosopher Voltaire noted: "If you see a banker jump out the window, it's probably a good idea to follow because there's most likely a profit in it." Dimon's sudden burst of largess and concern for his workers is like those crocodile tears  kids cry when they get caught doing something they know they shouldn't. It's has little to do with making America great again. It has everything to do with taking the heat of Dimon and his fellow elites. There's something called timing. Just ask Hilary. She knows a lot about it.

 JPMorgan CEO Jamie Dimon wants to make America great again.

In an op-ed article published in The New York Times on Tuesday, Dimon outlined a plan for the firm to raise wages for overtime-eligible employees over the next three years.

The firm's minimum wage for its 18,000 hourly employees in the US will move from $10.15 an hour to a range of $12 to $16.50 depending on market and location. It's a move similar to that announced by Starbucks on Monday.

In his article, Dimon wrote that a pay increase was "the right thing to do."

"Wages for many Americans have gone nowhere for too long," he continued. "Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth."Voltaire noted: "If you see a banker jump out the window, it's probably a good idea to follow becasue there's most likely a profit in it." 

It's a wonder they didn't have in that picture of Dimon a shot of mom and a slice of apple pie.

And They Have

This is one of those who's correct and who's wrong scenarios. What the article really shows is the panic among central banks and their taking a short-term outlook for obvious reasons, their credibility is nearly gone. Storming the gates could be just over the horizon.

It reminds of that old poem from the dying mother."Don't let my boy grow up to be a central banker, the dying mother said. Don't let my boy grow up to be a central banker, I'd rather see him dead."

After the Abe election victory Japanese investors expect more monetary oomph. The BOE head honcho, Mark Carney, is on record for saying he will provide stock market fuel. Magic Mario Draghi is still on the loose, sort-sellers worst nightmare. In the short run. For the entire article zerohedge.com/news/2016-07-12/mystery-who-pushing-stocks-all-time-highs-has-been-solved.
The long term short-the-market theme is still alive and well, yet one must be alert as to when and how one positions his or her play. These are scared people who fully understand now if this thing unravels and gets really ugly, a lamp post with their name on it might being waiting somewhere. These are tough times and tough times require tough people. Uncertainty is the rule of the day now, a lot more so than when that Berlin Wall crumbled and global bureaucrats got the opportunity of a millennium to screw it up. And the have.

One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year - the fastest pace of withdrawals for any first half on record...
... are these same markets trading at all time highs?  We now have the answer.

Recall at the end of January when global markets were keeling over, that Citi's Matt King showed that despite aggressive attempts by the ECB and BOJ to inject constant central bank liquidity into the gunfible global markets, it was the EM drain via reserve liquidations, that was causing a shock to the system, as net liquidity was being withdrawn, and in the process stocks were sliding.

Overnight

This is more a story about Wall Street where the S&P 500 index crossed over into new ground Monday than it is about Asian markets.  Last week the index bumped up against the new high but didn't right close there. The shift comes as the S&P 500 SPX, +0.34% hit an intraday record of 2,141.30 and closed at a record 2,137.16, surpassing its previous all-time high of 2,130.82 set May 21, 2015.

 Taking their lead apparently from the U.S., Asian markets across the board were up, continuing a bull move that started on Monday with the Nikkei 225 leading the pack, up 2.65%. The index is now up 6.7% in two days, this in anticipation of further stimulus from the Bank of Japan after Prime Minister Abe's election win on Sunday.

Reuters reported: Those gains are being replicated across the region, albeit on a smaller scale.
Like stocks, higher-yielding currencies are all up for the session, mirroring similar moves in commodity markets.
Government bonds yields, despite still remaining near all-time record lows, are also modestly higher.
The world is suddenly good again, just two week's after looking like it was all going to come to an end.
The only question now is what will happen when the expected stimulus splurge arrives, presuming that it will. A lot is being priced in, suggesting that there's scope for disappointment.
 
Anyway, that's for another day.

• ASX 200 5385.40 , 48.30 , 0.90%
• Nikkei 225 16124.36 , 415.54 , 2.65%
• Shanghai Composite 3010.55 , 15.63 , 0.52%
• Hang Seng 21025.34 , 144.84 , 0.69%
• KOSPI 1988.86 , 0.32 , 0.02%
• Straits Times 2890.66 , 14.52 , 0.50%
• S&P 500 Futures 2131.50 , 1.25 , 0.06%

Here's what action overnight looked like in other markets, again according to Reuters.
Currencies

• USD/JPY 102.98 , 0.19 , 0.18%
• USD/CNY 6.6997 , -0.0053 , -0.08%
• AUD/USD 0.7590 , 0.0061 , 0.81%
• NZD/USD 0.7266 , 0.0048 , 0.67%
• AUD/JPY 78.16 , 0.77 , 0.99%
• EUR/USD 1.1086 , 0.0030 , 0.27%
• GBP/USD 1.3085 , 0.0092 , 0.71%
• USD INDEX 96.336 , -0.2350 , -0.24%

Commodities

• Gold $1,355.20 , $0.35 , 0.03%
• Silver $20.38 , $0.12 , 0.57%
• WTI Futures $44.97 , $0.21 , 0.47%
• Copper Futures ¥37,080 , ¥260 0.71%
• Iron Ore Futures ¥443.50 , ¥16.00 , 3.74%

10-Year Bond Yields

• Australia 1.958%
• New Zealand 2.320%
• Japan -0.260%
• Germany -0.159%
• UK 0.761%
• US 1.437%