Tag: finance

The common meme goes something like… "if it wasn't for the Fed, we'd be…" [insert any and all apocalyptic counterfactual scenario]" However, on closer inspection of the "facts" – those things bloggers are so prone to hide behind – it would appear that the Fed has been a failure across the board…

Growth… #FAIL!

 

Uncertainty (Stabiliteeee)… #FAIL!

 

Inflation… #FAIL!!!

 

In sum, the Federal Reserve has failed on both parts of its dual mandate: growth necessary to maximize employment has not been achieved, and prices have clearly been anything but stable.

But to be fair, the Fed was originally created, not with the dual mandate of today, but rather to prevent
banking panics such as the brutal ‘Panic of 1907’.

 

#FAIL!! again – Just a little deeper, faster, more volatile, and a tad more panic-ier.

 

Source: @Not_Jim_Cramer

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mJQYGeR-8AY/story01.htm Tyler Durden

The common meme goes something like… "if it wasn't for the Fed, we'd be…" [insert any and all apocalyptic counterfactual scenario]" However, on closer inspection of the "facts" – those things bloggers are so prone to hide behind – it would appear that the Fed has been a failure across the board…

Growth… #FAIL!

 

Uncertainty (Stabiliteeee)… #FAIL!

 

Inflation… #FAIL!!!

 

In sum, the Federal Reserve has failed on both parts of its dual mandate: growth necessary to maximize employment has not been achieved, and prices have clearly been anything but stable.

But to be fair, the Fed was originally created, not with the dual mandate of today, but rather to prevent
banking panics such as the brutal ‘Panic of 1907’.

 

#FAIL!! again – Just a little deeper, faster, more volatile, and a tad more panic-ier.

 

Source: @Not_Jim_Cramer

Two days ago, when we described the immediate next steps now that the House had passed the latest debt target ceiling extension, we explained what would happen immediately after as follows: “next up, as the emergency Treasury measures are netted out against the new debt limit, it means that once the new Daily Treasury Statement hits, the total US Federal debt will be just at, or over $17 trillion. Rejoice.” Moments ago the first post-reopening DTS just hit, and it turns out our estimate was low. Because as of yesterday, the official US debt is now 17,075,590,107,963.57 an increase of $327 billion “overnight.”

We hope this will answer all that hyperventilating questions about how the total US debt can stay fixed at one number since May: basically the Treasury had utilized over $320 billion in emergency measures, and now they have been netted out against the “temporarily” suspended debt limit.

Of course, we are confident this number will figure far less prominently among tomorrow’s mainstream media papers, especially when the great unemployed masses and the 46 million on foodstamps have another record number, that of the stock market, to be distracted with.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ePcyvxLay2g/story01.htm Tyler Durden

Two days ago, when we described the immediate next steps now that the House had passed the latest debt target ceiling extension, we explained what would happen immediately after as follows: “next up, as the emergency Treasury measures are netted out against the new debt limit, it means that once the new Daily Treasury Statement hits, the total US Federal debt will be just at, or over $17 trillion. Rejoice.” Moments ago the first post-reopening DTS just hit, and it turns out our estimate was low. Because as of yesterday, the official US debt is now 17,075,590,107,963.57 an increase of $327 billion “overnight.”

We hope this will answer all that hyperventilating questions about how the total US debt can stay fixed at one number since May: basically the Treasury had utilized over $320 billion in emergency measures, and now they have been netted out against the “temporarily” suspended debt limit.

Of course, we are confident this number will figure far less prominently among tomorrow’s mainstream media papers, especially when the great unemployed masses and the 46 million on foodstamps have another record number, that of the stock market, to be distracted with.

Whether it is due to the recent margin hikes, a dwindling of greater fools, more scrutiny (albeit weak) by the regulators, increased free-money competition, or the monopolization of bandwidth; it would appear, from the following charts from Nanex, that we have seen Peak HFT. Quote Spam (the number of quotes per actual trade) has dropped to a 3 year low today.

 

Via Nanex,

On October 18, 2013, Quote/Trade ratios dropped to 3 year lows. Charts below chronicle the average number of quotes per trade for each 5 minute period of the regular trading session (9:30 to 16:00 ET) for all ~8000 NMS Stocks from 2007 to October 18, 2013 (through 10:45 ET). Each day is color coded by age – older dates start with purple while more recent dates are colored red.. The horizontal red line is in the future (after 10:30 ET on October 18, 2013).

 

Quotes per $10,000 Traded (accounts for trade size drop and changes in stock price)…

 

Quote per Trade overall…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tNMYcUXk3WQ/story01.htm Tyler Durden

Whether it is due to the recent margin hikes, a dwindling of greater fools, more scrutiny (albeit weak) by the regulators, increased free-money competition, or the monopolization of bandwidth; it would appear, from the following charts from Nanex, that we have seen Peak HFT. Quote Spam (the number of quotes per actual trade) has dropped to a 3 year low today.

 

Via Nanex,

On October 18, 2013, Quote/Trade ratios dropped to 3 year lows. Charts below chronicle the average number of quotes per trade for each 5 minute period of the regular trading session (9:30 to 16:00 ET) for all ~8000 NMS Stocks from 2007 to October 18, 2013 (through 10:45 ET). Each day is color coded by age – older dates start with purple while more recent dates are colored red.. The horizontal red line is in the future (after 10:30 ET on October 18, 2013).

 

Quotes per $10,000 Traded (accounts for trade size drop and changes in stock price)…

 

Quote per Trade overall…

Given his track record, Alan Greenspan’s publication of a guide to economic forecasting will likely prove as successful as Lance Armstrong’s guide to drug-free cycling. As Bloomberg reports, Greenspan’s new book “The Map and the Territory” is about as credible as art history by Mr. Magoo; as it pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.” Bloomberg’s Daniel Akst sums it up best with his concluding sentence: “‘The Map and the Territory’ is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.” Indeed…

Via Bloomberg,

…

 

As Fed chairman until 2006, practically the eve of the financial crisis, Greenspan couldn’t see the storm on the horizon.

 

Despite his mastery of the techniques described at somewhat numbing length in his book, he failed to draw any useful conclusions from a host of indicators that were pointing to trouble.

 

Omens were plentiful: the bubble in housing prices, the gross inadequacy of banking capital, the systemic risks of money-market funds, the explosive dangers of complex derivatives, the rise of an enormous and poorly regulated shadow banking system, the transparent pandering of the bond-rating companies, the collapse in mortgage-lending standards and the massive overleveraging of U.S. consumers.

 

…

 

“The Map and the Territory” pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.”

 

…

 

Greenspan’s plodding text oscillates maddeningly between equivocation and chutzpah. He implies that it was a mistake to bail out the big banks in 2008, yet doesn’t say what he would have done instead, leaving us to wonder if, in Ben Bernanke’s shoes, he would have let the global financial system go up in flames.

 

…

 

But this is an odd concern from the man whose actions as Fed chief gave rise to faith in the “Greenspan put,” the notion that, while he was in office, the central bank would rush to float sinking markets with lower interest rates whenever they faltered.

 

“The Map and the Territory” is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jGk63tsSeVI/story01.htm Tyler Durden

Given his track record, Alan Greenspan’s publication of a guide to economic forecasting will likely prove as successful as Lance Armstrong’s guide to drug-free cycling. As Bloomberg reports, Greenspan’s new book “The Map and the Territory” is about as credible as art history by Mr. Magoo; as it pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.” Bloomberg’s Daniel Akst sums it up best with his concluding sentence: “‘The Map and the Territory’ is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.” Indeed…

Via Bloomberg,

…

 

As Fed chairman until 2006, practically the eve of the financial crisis, Greenspan couldn’t see the storm on the horizon.

 

Despite his mastery of the techniques described at somewhat numbing length in his book, he failed to draw any useful conclusions from a host of indicators that were pointing to trouble.

 

Omens were plentiful: the bubble in housing prices, the gross inadequacy of banking capital, the systemic risks of money-market funds, the explosive dangers of complex derivatives, the rise of an enormous and poorly regulated shadow banking system, the transparent pandering of the bond-rating companies, the collapse in mortgage-lending standards and the massive overleveraging of U.S. consumers.

 

…

 

“The Map and the Territory” pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.”

 

…

 

Greenspan’s plodding text oscillates maddeningly between equivocation and chutzpah. He implies that it was a mistake to bail out the big banks in 2008, yet doesn’t say what he would have done instead, leaving us to wonder if, in Ben Bernanke’s shoes, he would have let the global financial system go up in flames.

 

…

 

But this is an odd concern from the man whose actions as Fed chief gave rise to faith in the “Greenspan put,” the notion that, while he was in office, the central bank would rush to float sinking markets with lower interest rates whenever they faltered.

 

“The Map and the Territory” is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.

Submitted by John Rubino via The Dollar Collapse blog,

In one sense, the past couple of weeks’ debt ceiling debate was just one more in a long line of annoying-but-otherwise-pointless pieces of bad political theater. But in another sense it was a turning point, one that may have put the democrats completely in charge. Consider:

In a system with two viable parties, each side has to pretend to be more reasonable than it really is in order to attract just enough moderate votes to win the next election. So democrats pay lip service to fiscal responsibility and deficits – occasionally even signing bills like welfare reform that they find repugnant – when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs. Republicans, meanwhile, pretend to empathize with people they privately view as prey when they’d rather be cutting taxes and invading places that have oil.

We only rarely get to see the major parties’ true selves because the 20% of voters in the middle are turned off by displays of naked avarice, and in a two-party system elections go to whoever carries a majority of that block.

That’s why the latest debt ceiling debacle is such a big deal. Government shutdowns and related turmoil have become a standard bargaining chip lately, without affecting the make-up of either party. But this time the main conflict was not between republicans and democrats, but between mainstream, log-rolling, back-scratching, career-politician republicans and a handful of representatives and senators elected with Tea Party – i.e., highly ideological – support. The latter have no interest in raising the debt ceiling under any circumstances and see a government shutdown as a positive end in itself. Defunding Obamacare was just the excuse.

They got rolled, of course, as regular republicans chose to raise the debt ceiling without condition (as everyone always knew they would). But the cost of reopening the government is a republican civil war with only two likely outcomes: 1) The two groups stay in the big tent but challenge each other in primaries and intrigue over committee seats, etc., making a united, coherent policy front impossible and handing the next few elections to the democrats. 2) The Tea Party/libertarian republicans leave and either join the existing libertarian party or start one of their own, siphoning just enough votes from republicans in future elections to keep the democrats in charge.

Already, it has started. See this from today’s Bloomberg:

Republican Civil War Erupts: Business Groups v. Tea Party

A battle for control of the Republican Party erupted today as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement.

 

“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.

 

Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary by Chris McDaniel, a state legislator.

 

McDaniel, who announced his candidacy today, “is not part of the Washington establishment and he has the courage to stand up to the big spenders in both parties,” Matt Hoskins, executive director of the Senate Conservatives Fund, said in a statement supporting him. Read more

 

Once the civil war costs the republicans control of the House of Representatives (November 4, 2014), the democrats will be relieved of the need to fool the middle about their commitment to fiscal sanity. The incoming Clinton administration and its congressional majorities will ramp up domestic spending and finance it with higher taxes, more borrowing and way more money printing. Janet Yellen (the perfect Fed chair for this transition) will expand QE and make it permanent. The Fed’s balance sheet will grow in trillion-dollar chunks as it buys up all the bonds issued by the government and the mortgage packagers and pretty much anybody else with paper to sell.

The resulting tidal wave of hot money will swamp emerging markets and drive Europe and Japan crazy, but the democrats won’t care because they’ll be favored by 20 points in the polls and in any event will be too busy hiring more staff to handle the upcoming legislative season to listen to non-believers. Oh, and they’ll counter any dissent with capital controls and stepped-up surveillance.

Could there be a better environment for gold? Not at first glance. But then almost the same could have been said two years ago when the Fed started buying $85 billion of bonds each month and bubbles began to form in stocks and houses. Some of that cash certainly should have found its way into precious metals. Instead the result was an epic correction. So logic isn’t necessarily our best guide here.

Still, the republican implosion/democrat ascendance comes after a two-year precious metals correction (during which China, India, and Russia bought something like 4,000 tons of gold, an amount greater than Germany’s entire gold reserves). So coming when it does, the combination of democrat dominance, an even more accommodating Fed and a growing shortage of Western gold to be shipped East…well, at the risk of being wrong again, this really does look like precious metals paradise.

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/oKAQvg6w7iY/story01.htm Tyler Durden

Submitted by John Rubino via The Dollar Collapse blog,

In one sense, the past couple of weeks’ debt ceiling debate was just one more in a long line of annoying-but-otherwise-pointless pieces of bad political theater. But in another sense it was a turning point, one that may have put the democrats completely in charge. Consider:

In a system with two viable parties, each side has to pretend to be more reasonable than it really is in order to attract just enough moderate votes to win the next election. So democrats pay lip service to fiscal responsibility and deficits – occasionally even signing bills like welfare reform that they find repugnant – when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs. Republicans, meanwhile, pretend to empathize with people they privately view as prey when they’d rather be cutting taxes and invading places that have oil.

We only rarely get to see the major parties’ true selves because the 20% of voters in the middle are turned off by displays of naked avarice, and in a two-party system elections go to whoever carries a majority of that block.

That’s why the latest debt ceiling debacle is such a big deal. Government shutdowns and related turmoil have become a standard bargaining chip lately, without affecting the make-up of either party. But this time the main conflict was not between republicans and democrats, but between mainstream, log-rolling, back-scratching, career-politician republicans and a handful of representatives and senators elected with Tea Party – i.e., highly ideological – support. The latter have no interest in raising the debt ceiling under any circumstances and see a government shutdown as a positive end in itself. Defunding Obamacare was just the excuse.

They got rolled, of course, as regular republicans chose to raise the debt ceiling without condition (as everyone always knew they would). But the cost of reopening the government is a republican civil war with only two likely outcomes: 1) The two groups stay in the big tent but challenge each other in primaries and intrigue over committee seats, etc., making a united, coherent policy front impossible and handing the next few elections to the democrats. 2) The Tea Party/libertarian republicans leave and either join the existing libertarian party or start one of their own, siphoning just enough votes from republicans in future elections to keep the democrats in charge.

Already, it has started. See this from today’s Bloomberg:

Republican Civil War Erupts: Business Groups v. Tea Party

A battle for control of the Republican Party erupted today as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement.

 

“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.

 

Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary by Chris McDaniel, a state legislator.

 

McDaniel, who announced his candidacy today, “is not part of the Washington establishment and he has the courage to stand up to the big spenders in both parties,” Matt Hoskins, executive director of the Senate Conservatives Fund, said in a statement supporting him. Read more

 

Once the civil war costs the republicans control of the House of Representatives (November 4, 2014), the democrats will be relieved of the need to fool the middle about their commitment to fiscal sanity. The incoming Clinton administration and its congressional majorities will ramp up domestic spending and finance it with higher taxes, more borrowing and way more money printing. Janet Yellen (the perfect Fed chair for this transition) will expand QE and make it permanent. The Fed’s balance sheet will grow in trillion-dollar chunks as it buys up all the bonds issued by the government and the mortgage packagers and pretty much anybody else with paper to sell.

The resulting tidal wave of hot money will swamp emerging markets and drive Europe and Japan crazy, but the democrats won’t care because they’ll be favored by 20 points in the polls and in any event will be too busy hiring more staff to handle the upcoming legislative season to listen to non-believers. Oh, and they’ll counter any dissent with capital controls and stepped-up surveillance.

Could there be a better environment for gold? Not at first glance. But then almost the same could have been said two years ago when the Fed started buying $85 billion of bonds each month and bubbles began to form in stocks and houses. Some of that cash certainly should have found its way into precious metals. Instead the result was an epic correction. So logic isn’t necessarily our best guide here.

Still, the republican implosion/democrat ascendance comes after a two-year precious metals correction (during which China, India, and Russia bought something like 4,000 tons of gold, an amount greater than Germany’s entire gold reserves). So coming when it does, the combination of democrat dominance, an even more accommodating Fed and a growing shortage of Western gold to be shipped East…well, at the risk of being wrong again, this really does look like precious metals paradise.

 

While “hard” data has been scarce in the US thanks to the shutdown, we recently noted that whet little we had recently indicated notable weakness relative to the survey-based “soft” data. Goldman has, in the past, indicated how little forecasting power the soft survey data has in Europe and yet still, day after day we are treated to the herd of mainstream media types proclaiming that Europe is recovering and that their fundamentals have turned a corner. The problem with that “story” is that is that is a lie. In fact, European macro data has been sliding since the start of September and has plunged recently to 3 month lows. Of course, the reality is that a record high for European stocks is all that matters to the fast-money charging momo players and betting against divergences from fundamentals is for dummies…

 

 

So please – please – do not try and pretend that the reason to buy European stocks is that fundamentals are improving – they are not! And Greece, well we already showed that they need a 3rd bailout, so don’t start!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BgmyM32NSkE/story01.htm Tyler Durden

While “hard” data has been scarce in the US thanks to the shutdown, we recently noted that whet little we had recently indicated notable weakness relative to the survey-based “soft” data. Goldman has, in the past, indicated how little forecasting power the soft survey data has in Europe and yet still, day after day we are treated to the herd of mainstream media types proclaiming that Europe is recovering and that their fundamentals have turned a corner. The problem with that “story” is that is that is a lie. In fact, European macro data has been sliding since the start of September and has plunged recently to 3 month lows. Of course, the reality is that a record high for European stocks is all that matters to the fast-money charging momo players and betting against divergences from fundamentals is for dummies…

 

 

So please – please – do not try and pretend that the reason to buy European stocks is that fundamentals are improving – they are not! And Greece, well we already showed that they need a 3rd bailout, so don’t start!

After the quickest collapse since the first week of the year (another congressional “fold”), spot VIX is now heading towards its highs of the day. The divergence between an ever-rising demand for the S&P 500 at all-time-highs and the bid for VIX is notable to say the least… or is this demand for calls (because when you know it’s going up, why not lever up as much as possible?)…

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Qbl6UtvwWEA/story01.htm Tyler Durden

After the quickest collapse since the first week of the year (another congressional “fold”), spot VIX is now heading towards its highs of the day. The divergence between an ever-rising demand for the S&P 500 at all-time-highs and the bid for VIX is notable to say the least… or is this demand for calls (because when you know it’s going up, why not lever up as much as possible?)…

 

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CONAFr4cDok/story01.htm Tyler Durden

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CONAFr4cDok/story01.htm Tyler Durden

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

 

The investment media regularly proclaims that Gold is a terrible investment and that investors should shun it in favor of stocks.

 

However, the fact of the matter is that Gold has dramatically outperformed the stock market for the better part of 40 years.

 

I say 40 years because there is no point comparing Gold to stocks during periods in which Gold was pegged to world currencies. Most of the analysis I see comparing the benefits of owning Gold to stocks goes back to the early 20^th century.

 

However Gold was pegged to global currencies up until 1967. Stocks weren’t. Comparing the two during this time period is just bad analysis.

 

However, once the Gold peg officially ended with France dropping it in 1967, the precious metal has outperformed both the Dow and the S&P 500 by a massive margin.

 

 

See for yourself… the above chart is in normalized terms courtesy of Bill King’s The King Report.

 

According to King, Gold has risen 37.43 fold since 1967. That is more than twice the performance of the Dow over the same time period (18.45 fold). So much for the claim that stocks are a better investment than Gold long-term.

 

Indeed, once Gold was no longer pegged to world currencies there was only a single period in which stocks outperformed the precious metal. That period was from 1997-2000 during the height of the Tech Bubble (the single biggest stock market bubble in over 100 years).

 

That’s Gold as a long-term investment. But what about as a short-term investment?

 

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

 

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver.  However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

 

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today.

 

 

Thus we have an asset class that historically has outperformed stocks, trading at a discount to the primary driver of its prices in the last five years. Seems like a set up worth considering….

 

For more market insights as well as several FREE investment reports, swing by:

http://gainspainscapital.com

 

Best Regards

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5_uWoRu0DiQ/story01.htm Phoenix Capital Research

 

The investment media regularly proclaims that Gold is a terrible investment and that investors should shun it in favor of stocks.

 

However, the fact of the matter is that Gold has dramatically outperformed the stock market for the better part of 40 years.

 

I say 40 years because there is no point comparing Gold to stocks during periods in which Gold was pegged to world currencies. Most of the analysis I see comparing the benefits of owning Gold to stocks goes back to the early 20^th century.

 

However Gold was pegged to global currencies up until 1967. Stocks weren’t. Comparing the two during this time period is just bad analysis.

 

However, once the Gold peg officially ended with France dropping it in 1967, the precious metal has outperformed both the Dow and the S&P 500 by a massive margin.

 

 

See for yourself… the above chart is in normalized terms courtesy of Bill King’s The King Report.

 

According to King, Gold has risen 37.43 fold since 1967. That is more than twice the performance of the Dow over the same time period (18.45 fold). So much for the claim that stocks are a better investment than Gold long-term.

 

Indeed, once Gold was no longer pegged to world currencies there was only a single period in which stocks outperformed the precious metal. That period was from 1997-2000 during the height of the Tech Bubble (the single biggest stock market bubble in over 100 years).

 

That’s Gold as a long-term investment. But what about as a short-term investment?

 

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

 

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver.  However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

 

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today.

 

 

Thus we have an asset class that historically has outperformed stocks, trading at a discount to the primary driver of its prices in the last five years. Seems like a set up worth considering….

 

For more market insights as well as several FREE investment reports, swing by:

http://gainspainscapital.com

 

Best Regards

Phoenix Capital Research