Month: November 2017

Gold prices are rallying, but retail gold dealers and shops are struggling to survive.

As The Wall Street Journal reports, businesses that sell gold coins and other products made from the precious metal usually thrive during years like 2017.

Gold futures have gained more than 10%, boosted by a weaker dollar and by big investors looking for a haven during recent geopolitical tensions surrounding North Korea and Iran.

But despite higher bullion prices and solid demand from not-American-central banks, American Eagle Coin sales by the US Mint in October 2017 are down 87% YoY for gold and down 73% YoY for silver…

h/t @Gloeschi

The weak demand is taking a toll on gold dealers, some of whose sales have dropped as much as 70% compared with last year, according to Jeffrey Christian, managing partner at market-research firm CPM Group.

“It’s been absolutely dismal," said Peter Thomas, senior vice president of metals at Zaner Precious Metals, a Chicago precious-metals dealer.

 

“A lot of guys have been really hurting.”

And as WSJ notes, one reason for the declining business: A number of retail buyers are turning to cryptocurrencies like bitcoin to store money during periods of stress, some analysts say.

Bitcoin has “taken some of the dedicated interest in gold away from gold,” said Mohamed El-Erian, chief economic adviser at Allianz SE, who warned at a CME Group event in September that cryptocurrencies could pose a long-term threat to the precious metal.

 

While gold buyers historically have looked to the precious metal as a place to hide during a market selloff, some suggest that virtual currencies are a new “hedge against chaos.”

 

Mr. Thomas of Zaner Precious Metals said authorized gold purchasers who buy directly from the U.S. Mint have been getting hurt, too, because of waning dealer demand.

 

“They end up having to stockpile coins,” he said.

 

“You would expect gold to be rocking at the present time, but it’s not," said Ross Norman, head of London-based gold dealer Sharps Pixley.

Furthermore, small investors appear to be getting gold exposure though ETFs with more than $8.5 billion flowing into State Street’s gold ETF, the largest gold ETF, since the end of 2015, reversing three years of net outflows and marking the biggest period for inflows since 2009, according to FactSet.

Jim Rickards (and Goldman) recently opined on the Bitcoin vs Gold debate…

From my perspective, you might as well discuss gold versus watermelons or bicycles versus bitcoin. In other words, it’s a phony debate. I agree that gold and bitcoin are both forms of money, but they go their own ways.

There’s no natural relationship between the two (what traders call a “basis”).

The gold/bitcoin basis trade does not exist. But people love to discuss it, and I guess Goldman Sachs is no different.

Goldman Sachs has released a new research report that comes down squarely on the side of gold as a reliable store of wealth rather than bitcoin, which is untested in market turndowns.

Precious metals like gold are “neither a historic accident or a relic,” said the report.

It affirmed that gold is more durable than cryptocurrencies because cryptocurrencies are vulnerable to hacking, government regulation and infrastructure failure during a crisis.

Goldman also reminds us that gold holds its purchasing better than cryptocurrencies and has much less volatility. In dollar terms, bitcoin has had seven times the volatility of gold this year.

Since Goldman’s research department has not been notable as a friend to gold, the fact that they favor gold over bitcoin is highly revealing in more ways than one.

I don’t deny that bitcoin has made some people multimillionaires, but I also believe it’s a massive bubble right now.

I don’t own any bitcoin and I don’t recommend it. My reasons have to do with bubble dynamics, potential for fraud and the prospect of government intrusion.

So bitcoin evangelists seem to think I’m a technophobe. But I’ve read many bitcoin and blockchain technical papers. I “get it” when it comes to the technology.

I even worked with a team of experts and military commanders at U.S. Special Operations Command (USSOCOM) to find ways to interdict and disrupt ISIS’ use of cryptocurrencies to fund their terrorist activities.

I will say, however, that I believe in the power of the technology platforms on which the cryptocurrencies are based. These are usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.

So although I am a bitcoin skeptic, I believe there is a great future for the blockchain technology behind them.

I’m not telling anyone not to own cryptocurrencies, but you need to do your homework before you do.

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Finally, this gentlement seems to sum up the general perspective…

“You can’t be parked in gold," said Casey Frazier, a government administrator in Woodstock, Conn., who used to hold nearly a third of his savings in gold.

He has moved some of his money into the booming stock market, and now his precious-metals allocation is down to 10%.

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Earlier this year we wrote about a series of court documents that were unsealed and seemingly revealed a startling effort on the part of both Monsanto and the Environmental Protection Agency (EPA) to work in concert to kill and/or discredit independent, albeit inconvenient, cancer research conducted by the World Health Organization’s International Agency for Research on Cancer (IARC) related to their key herbicidal product, RoundUp.  The efforts to kill the research came even as Monsanto’s own lead toxicologist, Donna Farmer, admitted that she “cannot say that Roundup does not cause cancer” because “[w]e [Monsanto] have not done the carcinogenicity studies with Roundup“ (see: Monsanto Colluded With EPA, Was Unable To Prove Roundup Does Not Cause Cancer, Unsealed Court Docs Reveal).

But, as Reuters points out today, RoundUp isn’t the only Monsanto herbicide causing outrage in the ag community these days as state regulators all across the country say they’re being flooded with reports from farmers that Dicamba, Monsanto’s other herbicide, is increasingly becoming airborne and killing crops far away from the fields where they were actually applied.

U.S. farmers have overwhelmed state governments with thousands of complaints about crop damage linked to new versions of weed killers, threatening future sales by manufacturers Monsanto Co (MON.N) and BASF SE (BASFn.DE).

 

Monsanto is banking on weed killers using a chemical known as dicamba – and seeds engineered to resist it – to dominate soybean production in the United States, the world’s second-largest exporter.

 

The United States has faced a weed-killer crisis this year caused by the new formulations of dicamba-based herbicides, which farmers and weed experts say have harmed crops because they evaporate and drift away from where they are applied.

Regulators in several major soybean-growing states, including Arkansas, Missouri and Illinois, each say they received roughly four years’ worth of complaints about possible pesticide damage to crops this year due to dicamba use.

Now agriculture officials face long backlogs of cases to investigate, which are driving up costs for lab tests and overtime. Several states had to reassign employees to handle the load.

 

“We don’t have the staff to be able to handle 400 investigations in a year plus do all the other required work,” said Paul Bailey, director of the Plant Industries division of the Missouri Department of Agriculture.

 

In Missouri, farmers filed about 310 complaints over suspected dicamba damage, on top of the roughly 80 complaints about pesticides the state receives in a typical year, he said.

 

Nationwide, states launched 2,708 investigations into dicamba-related plant injury by Oct. 15, according to data compiled by the University of Missouri.

Of course, Monsanto has bet on dicamba-tolerant soybeans to replace those that withstand glyphosate, the key ingredient in RoundUp, because it has become less effective over the years as weeds develop resistance…and because of that pesky European research which suggests the product causes cancer.

The problem is that if you’re not planting dicamba-resistant soybean seeds then you could quickly find yourself among the growing list of Monsanto’s spray drift victims….so you better buy Monsanto seeds…see how that works?

Of course, Monsanto has decided to simply blame spray companies saying that the “herbicides are safe when properly applied.”

Monsanto and BASF say the herbicides are safe when properly applied. They need to convince regulators after the flood of complaints to state agriculture departments.

 

The U.S. Environmental Protection Agency (EPA) last year approved use of the weed killers on dicamba-resistant crops during the summer growing season. Previously, farmers used dicamba to kill weeds before they planted seeds, and not while the crops were growing.

 

However, the EPA approved such use only until Nov. 9, 2018, because “extraordinary precautions” are needed to prevent dicamba products from tainting vulnerable crops, a spokesman told Reuters in a statement last week. The agency wanted to be able to step in if there were problems, he said.

 

Next year, the EPA will determine whether to extend its approval by reviewing damage complaints and consulting with state and industry experts. States are separately considering new restrictions on usage for 2018.

In conclusion, with Dicamba usage up for regulatory review, it seems that it may be time for Monsanto execs to start pulling some strings at the EPA again…

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At the last FOMC meeting – on September 20th – Janet Yellen and her merry band of failed forecasters proclaimed that the Federal Reserve Balance Sheet would be allowed to normalize with reinvestments slowed or stopped in October.

There’s just one thing…

The Federal Reserve balance sheet has risen by over $5 billion in October – the biggest monthly rise since February.

 

Now, we are well aware of the lags in reporting data from SOMA but this is as of last Wednesday and so unless The Fed suddenly dumped over $5 billion in its balance sheet on Thursday and Friday, we suspect ‘normalization’ means something different to the PhDs at The Fed than it does to the avereage joe.

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Authored by Charles Hugh Smith via OfTwoMinds blog,

Imagine Harvey Weinstein wielding a "top secret" stamp to block any exposure of the uncomfortable truth and you have the FBI, CIA and NSA.

One way to interpret the intelligence community's reluctance to let all the Kennedy assassination archives become public is that the archives contain evidence of a "smoking gun": that is, evidence that the intelligence agencies of the United States of America were complicit in the assassination of the President.

I think the agencies fear something larger: exposure of their gross incompetence, their "cowboy" recklessness and their disavowal of elected-civilian control. Their fear of this exposure is based on one simple fact: nothing's changed since 1963. They were unaccountable and incompetent then, and they remain unaccountable and incompetent now. The only difference is their funding has greatly increased.

We rarely get an insider's glimpse of the intelligence community's pettiness, hubris and incompetence. The Ministry of Propaganda is tasked with showing the NSA, CIA, FBI, et al. as super-competent, super-dedicated, and focused on defeating evil (which is always presented as unambiguously evil, i.e. anti-American.)

Although it's 30 years old, I still recommend this account of a top MI5 (U.K.) officer, SpyCatcher: The Candid Autobiography of a Senior Intelligence Officer.

I've read many books on the intelligence community, but few (if any) reveal the inter-agency rivalries and bad blood that (as far as I can tell) still exist beneath a formal veneer of co-operation. The CIA and FBI were always envious of the NSA's SigInt (signal intelligence, i.e. eavesdropping), and so they've attempted to create their own versions, with laughably incompetent results in the case of the FBI's "Russians stole the election" inquiry.

The CIA was also envious of the Pentagon's Black Ops capabilities, so they created their own Black Ops division as well as SigInt capabilities. They also horned in on the FBI's monopoly on domestic spying in the 1970s; they wanted it all, and chose to create their own versions of the competing agencies.

Unfortunately for the nation, their petty rivalries, general incompetence and penchant for political vendettas, coups, assassinations, patsies, fall-guys, and other "cowboy" recklessness is vividly revealed by the Kennedy archives.

Rather than protect the nation, these unaccountable and uncontrollable agencies have endangered the nation behind their Iron Curtain of secrecy, a convenient cloak which masks their hubris, incompetence, pettiness and complicity in cover-ups of the truth that cannot be revealed to the American public lest it embarrass the powerful.

Imagine Harvey Weinstein wielding a "top secret" stamp to block any exposure of the uncomfortable truth and you have the FBI, CIA and NSA. Forget the smoking gun, look at the complicity in the cover-ups of incompetence and gross errors of judgment: no conspiracy or tin-foil hat required.

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Investigators from the FBI and NYPD probing the background of 29-year-old suspected terrorist Sayfullo Saipov – who was taken into custody alive after yesterday's grisly Halloween attack in Lower Manhattan – say that he planned the attack weeks ahead of time, the Washington Post reported.

Gov. Andrew Cuomo said the attacker was influenced by the Islamic State and its violent tactics after arriving in this country from Uzbekistan. Officials say the suspected attacker, Sayfullo Saipov, left a note declaring his allegiance to the group. Authorities have found no direct connection between Saipov and ISIS, and the group typically doesn't take credit for attacks when the attacker is captured alive.

However, in a chilling revelation that suggest Saipov might've left clues about his intentions for authorities, the Daily Mail reported that an image showing an individual, who isn't pictured, holding a photo of the ISIS flag at the exact spot where Saipov allegedly mounted the barrier onto the West Side Highway bike path, emerged online some two months ago.

More details about the attack were released Wednesday afternoon during a press conference with NYC Mayor Bill DeBlasio, Cuomo and NYPD Police Chief Jim O'Neil. Cuomo and DeBlasio also discussed previously undisclosed details during an appearance on CNN.

“The evidence shows . . . that after he came to the United States, is when he started to become informed about ISIS and radical Islamic tactics,” Cuomo said during an appearance on CNN’s “New Day”, using one of the acronyms for the group.

 

“We have no evidence yet of associations or continuing plot or associated plots, and our only evidence to date is that this was an isolated incident that he himself performed.”

In the photo, an individual can be seen holding a phone on the corner of Houston Street and West Street in Manhattan with skyscrapers including 1 World Trade Center in the background. According to the respected SITE group which monitors terror activity, the image appeared two months ago. ISIS propaganda was found at the crime scene, a long with knives purportedly belonging to Saipov.

The Mail noted Saipov's method has all the hallmarks of an ISIS attack, which the group has touted in its monthly magazine – including using a rented vehicle, leaving propaganda inside, and following up the vehicle attack with secondary weapons. ISIS had also issued a propaganda poster earlier in the day calling for attacks on Halloween, though it featured an image of Paris rather than New York. Saipov's method also has all the hallmarks of an ISIS attack, which the group has touted in its monthly magazine – including using a rented vehicle, leaving propaganda inside, and following up the vehicle attack with secondary weapons.

While ISIS hasn't officially taken responsibility for the attack, pro-ISIS channels have been sharing propaganda praising Saipov's brazen attack. As we noted earlier, the attacker reportedly seemed pleased that his attack had been a "success".

Posters commemorating the attack were uploaded online featuring images of the Statue of Liberty exploding and pictures of the carnage caused by 29-year-old Uzbek terrorist Sayfullo Saipov. But while some praised Saipov's actions, thers mocked the low death toll and said they 'would have picked a bigger street'.

Meanwhile, Trump said just minutes ago that he wants to work with Congress to eliminate the diversity lottery program that allowed Saipov legal entry into the US, Reuters reported.

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This must be some kind of record.

The number of publicly disclosed sex-crime investigations targeting disgraced Hollywood studio head Harvey Weinstein has risen to six following media reports that the Beverly Hills Police Department has opened an investigation of its own, while the New York Police Department has opened a second investigation.

Investigations involving the LAPD, Scotland Yard, and FBI were reported last month. In addition to investigating harassment allegations against Weinstein, the Beverly Hills Police Department is also investigating similar allegations involving director James Toback. The department said in a press release Tuesday night that they have received multiple complaints about both the movie mogul Weinstein and the director Toback and are investigating the alleged improprieties. According to a running tally maintained by the LA Times. Toback has been accused of harassment and abuse by more 200 women. Meanwhile, more than 80 women who have accused Weinstein of harassment, groping or rape dating back to the 1970s.

Actresses Asia Argento, Rose McGowan, Lucia Evans and Lysette Anthony have all publicly stated that they were raped or forced to perform a sex act by Weinstein. In Los Angeles, police are investigating an Italian model-actress’ accusations of being forced by Weinstein to have sex with him in her hotel room in 2013.

British police are investigating 11 allegations of sexual assaults against Weinstein that span several decades, sources said Tuesday.

Authorities said the alleged attacks involved seven women and that nine were reported to have occurred on British soil. Three women have stepped forward within the last week, British police said, including one who claimed she was attacked in the early 1990s.

ABC News was first to report that the NYPD has two active cases involving Weinstein.

The alleged victims are Lucia Evans, the actress who previously told the New Yorker Weinstein exposed himself and physically forced her to perform oral sex on him, and another woman who wasn’t named. Importantly, neither case is subject to New York’s statute of limitations.

However, the NYPD reportedly isn’t investigating allegations made by Annabella Sciorra, the actress who went public to the New Yorker saying Weinstein raped her in her apartment in the 1990s.

As part of the ongoing investigation, NYPD detectives traveled in the last two weeks to Montreal to interview a witness, the department said. Detectives have also considered, but have not yet traveled elsewhere, including to Los Angeles. The department's travels and assistance to departments in other jurisdictions must be connected to the New York City cases.

ABC reports the NYPD and Manhattan DA’s office have received multiple calls to their sex crimes hotlines concerning the disgraced producer. The vast majority of accusations have involved alleged groping or forcible sexual conduct, which are subject to strict statute of limitations and cannot be prosecuted today.

Meanwhile, as Weinstein moves ahead with efforts to sue his former company for terminating him, the New York Post is reporting The Weinstein Company’s talks to obtain a $35 million lifeline from Fortress Investment Group have stalled amid concerns about the flailing Hollywood studio’s finances.

The chances of a deal getting done have recently slid to “roughly 50 percent,” a source told the Post. Bloomberg had reported last week that the financing was imminent.

It was also reported last week that Colony Capital, led by Trump adviser Thomas Barrick Jr., had backed out of plans to purchase the Weinstein Co’s major assets after providing it with a temporary cash infusion.

While the Post cautions that the situation involving Fortress is still fluid, without the money, the company could soon be forced into bankruptcy.
 

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By EconMatters

We discuss Herbalife stock (HLF) as basically being the poster child for the Stock Market, Bitcoin Market and a reflection of how Central Banks are all twiddling their thumbs while Rome is burning, they just are about as clueless and irresponsible custodians of financial markets` prudential regulation as one can get. Expect a major correction coming in financial markets, go to cash now, everything must be in cash!

 

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True to form, the Atlanta Fed – which has a habit of overshooting massively at the start of the quarter based on optimistic estimates only to ease sharply lower on its GDP “nowcast” as the “hard” data comes in – has unveiled its latest Q4 GDP estimate , which the regional Fed expects to print at a blistering 4.5%. The number is more than 50% higher the previous Q4 guesstimate of 2.9%.

Why the surge? The Atlanta Fed looked at today’s mfg ISM report and effectively doubled its forecast for real consumer spending growth and real private fixed investment growth increased from 2.8% and 4.4% , respectively, to 4.1%  and 8.8%, respectively. Breaking down the estimate, which was boosted by excess hurricane-related spending, by its constituent components:

• Latest release affecting the model was ISM manufacturing, construction spending
• PCE contribution est. at 2.80%
• Nonresidential equipment investment contribution est. at 0.95%
• Nonresidential intellectual property products investment contribution est. at 0.18%
• Nonresidential structures investment contribution est. at -0.08%
• Residential investment contribution est. at 0.37%
• Government contribution est. at 0.31%
• Net exports contribution est. at -0.20%

Here is the commentary:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 4.5 percent on November 1, up from 2.9 percent on October 30. The forecasts of real consumer spending growth and real private fixed investment growth increased from 2.8 percent and 4.4 percent, respectively, to 4.1 percent and 8.8 percent, respectively, after this morning’s Manufacturing ISM Report On Business from the Institute for Supply Management. The model’s estimate of the dynamic factor for October—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.04 to 1.43 after the ISM report.

If accurate, this would be the highest pace of economic growth since Q3 2014, and the fourth highest quarterly GDP number since the financial crisis.

We now await to see if the forecast from the New York Fed will validate this euphoric projection.

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