Category: zerohedge

Via Dana Lyons' Tumblr,

Assets in bearish mutual funds just dropped to the lowest level since the onset of the August 2015 market rout.

One way to measure potential risk in the stock market is via sentiment, i.e., the level of investor bullishness, bearishness, etc. There are countless sentiment indicators in existence, but 2 main types, surveys and real-money indicators. Surveys are just that, surveys of a particular group of investors regarding their view toward the stock market’s prospects. And while various surveys have been helpful throughout the years, they are not always reliable as people may say one thing but act in a contrary manner. In other words, they don’t always put their money where their mouth is. That is why we prefer real-money gauges of sentiment, i.e., what investors are actually doing with their capital. Money talks and what investors are actually doing with their money talks louder than what they say they are doing.

That brings us to today’s Chart Of The Day. There are a few surveys out there that point to very subdued investor sentiment of late. It is an interesting phenomenon considering the fact that major stock averages have remained relatively close to their respective 52-week, or all-time, highs for several months. This would seem to represent the proverbial “wall of worry” that stocks like to use as a climbing aid. However, we’re not so sure this read is reliable. That’s because other, real-money, indicators do not necessarily corroborate this story. One such metric is the amount of assets in inverse, or bearish, mutual funds, such as those offered by Guggenheim (formerly Rydex).

Rydex funds are geared toward more active or tactical traders. Therefore, tracking the level of assets in their funds can provide a glimpse into the prevailing investor sentiment among the group. Rydex provides the level of assets in their mutual funds on a daily basis so it makes this easy to track. Interestingly, and contradictory to some of the subdued survey readings, on Tuesday, October 11, the level of Rydex bearish fund assets dropped to the lowest level since August 20, 2015. Of course, that was during the onset of a nasty plunge in the stock market. (FYI, this calculation is based on a select number of the most popular Rydex inverse funds that we track. It is not a comprehensive tally and may differ from other vendors.)

 

It is important to remember that sentiment analysis is not always flashing a signal. Most of the time, sentiment is neutral, or only leaning slightly in one direction or the other. When it reaches an extreme, i.e., overly bullish or bearish, it can provide valuable information about the potential risk in the market.

Another way we like to monitor sentiment is to track its reaction to price behavior. For instance, how do investors react in the wake of sharp price rises and drops? We posted examples of this last February and in October 2015. In both instances, the stock market had just bounced sharply for roughly a week following devastating declines. But instead of rushing to exit the bear funds, Rydex traders poured substantial amounts of money into the bear funds – during the rally. This was a sign that traders were still concerned about the recent decline and skeptical toward the sharp bounce. As it turns out, the market would climb that wall of worry both times as it pressed higher in the early stages of substantial intermediate-term rallies.

Presently, we have a different, though not entirely opposite, dynamic. Over the past month, the stock market has experienced some turbulance, including in early September and early this week. And while this “weakness” hasn’t been significant by traditional historical standards, compared to the placid run-up since early July, it would qualify as relative weakness. So how have Rydex traders reacted? As the chart demonstrates, they’ve reacted by dumping their Bear funds – to the point where assets in such funds are the lowest since August 2015.

Our assessment of this development is that Rydex traders are quite complacent and unconcerned about imminent market weakness. From a contrarian basis, this is a negative for stocks, in our view, and represents an elevated level of potential risk. One reason is that, if more selling does occur, these traders are ill-prepared, position-wise, to withstand many losses before they feel the pain. That low level of hedging could, lead them to increase their selling or hedging in search of protection during the selloff. In turn, that selling can lead to an acceleration of market losses.

A few issues we’ll quickly touch on surrounding this data point. Last August when Bear assets were last at current levels, they were on the rise, unlike now as they are on the decline. That suggests that these assets certainly could go lower. Moreover, they can stay lower for a time. That is a valid point. There is nothing special about the present level of assets, except that they are lower than any point since last August.

However, a key point is that they are still going down. This is a valuable sign that traders are indeed complacent, despite the recent (albeit moderate) selling pressure. At least last August, traders had already begun to ramp up their hedges. That process has not even begun in this case. If there is indeed more selling pressure to come (which we think is likely), these assets will need to rise significantly before any bullish sentiment readings are given off.

Another issue which folks may raise, and which is also valid, is that mutual fund assets, as a whole, are in a structural decline. This is true and has been the trend since ETF’s exploded on the scene about a decade ago. However, again, that is a longer-term structural issue. In the shorter-term, there is still plenty of room for sizable swings in asset levels depending on the market’s behavior. Witness the selloffs last summer and early 2016 when these Bear assets increased by threefold. Thus, despite the structural decline, there is plenty of room in the shorter-term for effective sentiment signals to be generated.

And presently, based on our read of the situation, bearish fund traders appear to be in hibernation. This is a potential negative for stocks in the short to intermediate-term and could lead to an acceleration of any forthcoming selling that may unfold.

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More from Dana Lyons, JLFMI and My401kPro.

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Even the Wall Street Journal is now fed up with the biased media coverage of the 2016 Presidential election as revealed by a scathing article written by Kimberly Strassel, a member of their editorial board.  As Strassel points out, it’s almost impossible to turn on the TV without hearing about Trump’s “lewd” comments while coverage of Hillary “uniformly ignores the flurry of bombshells” inherent in the various WikiLeaks, FOIA releases and FBI interviews.

If average voters turned on the TV for five minutes this week, chances are they know that Donald Trump made lewd remarks a decade ago and now stands accused of groping women.

 

But even if average voters had the TV on 24/7, they still probably haven’t heard the news about Hillary Clinton: That the nation now has proof of pretty much everything she has been accused of.

 

It comes from hacked emails dumped by WikiLeaks, documents released under the Freedom of Information Act, and accounts from FBI insiders. The media has almost uniformly ignored the flurry of bombshells, preferring to devote its front pages to the Trump story. So let’s review what amounts to a devastating case against a Clinton presidency.

Of course, the list of Hillary scandals is becoming way to long to remember though one of the biggest has been her establishment of the now infamous private email server and the subsequent intentional destruction of federal records despite the existence of a Congressional subpoena.

Start with a June 2015 email to Clinton staffers from Erika Rottenberg, the former general counsel of LinkedIn. Ms. Rottenberg wrote that none of the attorneys in her circle of friends “can understand how it was viewed as ok/secure/appropriate to use a private server for secure documents AND why further Hillary took it upon herself to review them and delete documents.” She added: “It smacks of acting above the law and it smacks of the type of thing I’ve either gotten discovery sanctions for, fired people for, etc.”

 

A few months later, in a September 2015 email, a Clinton confidante fretted that Mrs. Clinton was too bullheaded to acknowledge she’d done wrong. “Everyone wants her to apologize,” wrote Neera Tanden, president of the liberal Center for American Progress. “And she should. Apologies are like her Achilles’ heel.”

 

Clinton staffers debated how to evade a congressional subpoena of Mrs. Clinton’s emails—three weeks before a technician deleted them. The campaign later employed a focus group to see if it could fool Americans into thinking the email scandal was part of the Benghazi investigation (they are separate) and lay it all off as a Republican plot.

 

Meanwhile, as Fox News reported yesterday, according to an anonymous source within the FBI the “vast majority” of the people that worked on Hillary’s case thought she should be prosecuted adding that “it was unanimous that we all wanted her [Clinton’s] security clearance yanked.”

The source, who spoke to FoxNews.com on the condition of anonymity, said FBI Director James Comey’s dramatic July 5 announcement that he would not recommend to the Attorney General’s office that the former secretary of state be charged left members of the investigative team dismayed and disgusted. More than 100 FBI agents and analysts worked around the clock with six attorneys from the DOJ’s National Security Division, Counter Espionage Section, to investigate the case.

 

“No trial level attorney agreed, no agent working the case agreed, with the decision not to prosecute — it was a top-down decision,” said the source, whose identity and role in the case has been verified by FoxNews.com.

 

A high-ranking FBI official told Fox News that while it might not have been a unanimous decision, “It was unanimous that we all wanted her [Clinton’s] security clearance yanked.”

 

“It is safe to say the vast majority felt she should be prosecuted,” the senior FBI official told Fox News. “We were floored while listening to the FBI briefing because Comey laid it all out, and then said ‘but we are doing nothing,’ which made no sense to us.”

Moreover, the Wall Street Journal points out that the Obama administration was seemingly “working as an extension of the Clinton campaign” with both the State Department and DOJ providing frequent updates to Hillary staffers about a confidential criminal investigation into her misconduct.

The Obama administration—the federal government, supported by tax dollars—was working as an extension of the Clinton campaign. The State Department coordinated with her staff in responding to the email scandal, and the Justice Department kept her team informed about developments in the court case.

 

Worse, Mrs. Clinton’s State Department, as documents obtained under the Freedom of Information Act show, took special care of donors to the Clinton Foundation. In a series of 2010 emails, a senior aide to Mrs. Clinton asked a foundation official to let her know which groups offering assistance with the Haitian earthquake relief were “FOB” (Friends of Bill) or “WJC VIPs” (William Jefferson Clinton VIPs). Those who made the cut appear to have been teed up for contracts. Those who weren’t? Routed to a standard government website.

 

The leaks show that the foundation was indeed the nexus of influence and money. The head of the Clinton Health Access Initiative, Ira Magaziner, suggested in a 2011 email that Bill Clinton call Sheikh Mohammed of Saudi Arabia to thank him for offering the use of a plane. In response, a top Clinton Foundation official wrote: “Unless Sheikh Mo has sent us a $6 million check, this sounds crazy to do.”

Strassel also takes direct aim at the press and admits that the “leaks also show that the press is in Mrs. Clinton’s pocket.”  While the WikiLeaks emails reveal substantial coordination between Clinton and the press perhaps none are more disturbing than when Donna Brazile, now DNC chair, sent the exact wording of a CNN town hall question to Hillary ahead of a scheduled debate. 

The leaks also show that the press is in Mrs. Clinton’s pocket. Donna Brazile, a former Clinton staffer and a TV pundit, sent the exact wording of a coming CNN town hall question to the campaign in advance of the event. Other media allowed the Clinton camp to veto which quotes they used from interviews, worked to maximize her press events and offered campaign advice.

 

Mrs. Clinton has been exposed to have no core, to be someone who constantly changes her position to maximize political gain. Leaked speeches prove that she has two positions (public and private) on banks; two positions on the wealthy; two positions on borders; two positions on energy. Her team had endless discussions about what positions she should adopt to appease “the Red Army”—i.e. “the base of the Democratic Party.”

Finally, Strassle concludes by saying that “Voters might not know any of this, because while both presidential candidates have plenty to answer for, the press has focused solely on taking out Mr. Trump. And the press is doing a diligent job of it.”

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Another day, another data dump. In what is now a daily routine, moments ago Wikileaks released yet another roughly 1,150 emails in Part 7 of its ogoing Podesta Email dump, which brings the total number of released emails to 10,169.

RELEASE: The Podesta Emails Part 7 https://t.co/2yG9TNArqi #HillaryClinton #imWithHer #PodestaEmails #PodestaEmails7 http://pic.twitter.com/NfTC3VK1mU

— WikiLeaks (@wikileaks) October 14, 2016

 

In a tangent, earlier today, The Hill had a hit piece noting that “Assange grudge against Clinton shapes US election“, reporting that the Wikileaks founder’s “grudge against Hillary Clinton is playing out on the grandest stage possible.”

Between now and Election Day on Nov. 8, WikiLeaks is expected to release more than 40,000 more emails about Hillary Clinton that are meant to damage her run for the White House — possibly in batches on a near-daily basis.

 

The emails, from hacks of the Democratic National Committee and Clinton confidante John Podesta’s email account, may be the best chance Republican presidential nominee Donald Trump has of knocking off Clinton, the heavy favorite to win the White House.

 

That makes Wikileaks founder Assange one of 2016’s biggest wild cards.

 

 

Assange appears to relish the role. “He has become which is what I think he always wanted to be: an alternative statesman,” said Daniel Domscheit-Berg, a former spokesperson from the organization’s early days. “He’s not officially elected, but he’s involved in the highest level of political debate. He can have an influence on the U.S. election. It doesn’t really get much bigger than this.”

 

Assange has repeatedly vowed to release information expected to be damaging to Clinton, and on Thursday made public the sixth installment of material allegedly stolen from Podesta, Clinton’s campaign chairman.
* * *

 

It’s unclear why Assange has such a grudge against Clinton, though it appears to be rooted in part in the prosecution of former Pvt. Chelsea Manning for the leak of hundreds of thousands of diplomatic cables during Clinton’s tenure at the State Department.
* * *
In February, Assange, who is living in the Ecuadorian embassy in London and is avoiding a rape charge he claims is politically motivated, published an editorial on WikiLeaks calling Clinton a “war hawk with bad judgment who gets an unseemly emotional rush out of killing people.” “She shouldn’t be let near a gun shop, let alone an army. And she certainly should not become president of the United States,” he wrote.

 

Shortly after Clinton, sick with pneumonia, staggered leaving a Sept. 11 memorial event, the account tweeted a public poll inviting users to speculate whether she had an allergy problem, Parkinsons, MS or head injury complications. WikiLeaks later deleted the tweet shortly thereafter, saying that “the possibilities are too speculative.”

 

For some former employees who believed in WikiLeaks’ stated mission of transparency, the attacks on Clinton have been deeply demoralizing. Domscheit-Berg and others left the organization over concerns that Assange’s autocratic grip over the organization had led him to use it as a platform to promote his own agenda, not root out abuses of power.

So far the releases, while incriminating, have not been crushing from a legal standpoint, especially when considering the captured US judicial system. Although, with some 40,000 emails more to go, this may change in the coming days.

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Following the unexpectedly hot Chinese inflation data, where PPI posted its first annual increase since March 2012, moments ago the BLS reported that like in China, US wholesale prices also rose more than the 0.2% expected, up 0.3% in September, following an unchanged print the prior month. Over 75% of the jump was driven to an increase in goods prices.  On an annual basis, the final demand index increased 0.7% in September from a year ago, the largest 12-month rise since advancing 0.9% in December 2014.

The index for final demand less foods, energy, and trade services moved up 0.3% in September, the same as in August. For the 12 months ended in September, prices for final demand less foods,  energy, and trade services rose 1.5 percent, the largest increase since climbing 1.5 percent for the 12 months ended November 2014.

The breakdown was as follows:

Final demand goods: The index for final demand goods advanced 0.7 percent in September following a 0.4-percent decline in August. Over 60 percent of the broad-based rise can be attributed to a  2.5-percent increase in prices for final demand energy. The index for final demand goods less foods and energy moved up 0.3 percent, and prices for final demand foods advanced 0.5 percent.

Product detail: Thirty percent of the September rise in the index for final demand goods can be traced to a 5.3-percent increase in gasoline prices. The indexes for pharmaceutical preparations, fresh and dry vegetables, diesel fuel, jet fuel, and residential natural gas also moved higher. In contrast, prices for beef and veal fell 3.7 percent. The indexes for carbon steel scrap and asphalt also declined. (See table 4.)

Final demand services: In September, prices for final demand services inched up 0.1 percent, the same as in August. The September advance was led by the index for final demand services less trade, transportation, and warehousing, which rose 0.2 percent. Prices for final demand transportation and warehousing services increased 1.3 percent. Conversely, the final demand trade services index decreased 0.4 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A major factor in the September rise in the index for final demand services was prices for securities brokerage, dealing, investment advice, and related services, which advanced 3.9 percent. The indexes for airline passenger services, machinery and equipment wholesaling, food and alcohol retailing, and hospital inpatient care also moved higher. In contrast, margins for apparel, jewelry, footwear, and accessories retailing fell 5.2 percent. The indexes for guestroom rental, machinery and equipment parts and supplies wholesaling, and apparel wholesaling also declined.

 

Finally, spot where Congress began its crackdown on drug prices.

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Just as we detailed previously, headline retail sales data met expectations with a 0.6% rise MoM but the control group missed expectations with a mere 0.1% rise (vs 0.4% expectations). However, year-over-year, control group retail sales rose just 2.5% – the slowest gain since Nov 2015.

Historically, retail sales growth this slow has tended to lead to recession…

 

The breakdown shows that sales grew most in Gas Stations (higher prices) and Building materials (storm-related?) while department stores slowed notably.

 

Furthermore, it seems, just as we noted previously, that the release of the iPhone 7 did nothing at all for electronics sales (which dropped 0.9% in Aug).

 

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Submitted by Jeffrey Snider via Alhambra Investment Partners,

A great many asset classes have been moving almost perfectly sideways for months now. That is unusual by any standard, but more so given the circumstances of late 2016. This might be indicative of doubts, some of which are being reinforced by weakness that might be characterized as “unexpected” but really no longer is.

Yesterday’s data on Chinese exports is a good example. To hear economists tell it, the weak start to this year as leftover from last year was a close call but one that is now just history. This is the view that predominates of wishful thinking on the FOMC. And, at times, it did seem as if this was a realistic scenario; Chinese trade including imports did appear to be improving if only as less negative. But as optimism builds for that scenario it is regularly interrupted by its opposite; September exports fell very sharply, casting serious doubts as to what the real trajectory might be. Is it actual growth just delayed, or more of the same stagnation and worse?

Translating that into asset markets, especially stocks, it has resulted in what can only be described as indecision. In the past two weeks, however, the hesitancy has manifested in a highly unusual trading pattern. For the second week in a row, the S&P 500 just underwent another “inside week.” That is a technical term for where the index fails to match the prior week’s range at either the top or the bottom. The market trades the whole week “inside” the prior week’s range.

To do it once is rare; two in a row is especially so and thus perhaps deserving of attention in the context of this tentativeness over the past few months. As CNBC reported earlier this week:

“Inside weeks happening several weeks in a row is almost unheard of,” Miller Tabak equity strategist Matt Maley commented Monday on CNBC’s “Trading Nation,” calling it a sign that investors “don’t know what’s going to happen next — they don’t know what to do with their money.”

According to CNBC, the last three times two “inside weeks” in a row were spotted was February 2008, June 2007, and January 2000. I am not a big proponent of technical analysis, but where it may match fundamental possibilities and do so in such an outlier fashion needs to be at least considered. Those periods are immediately recognizable for their close (economic) comparisons to how the current environment may be described – and how markets weren’t sure then as now what to make of all that.

In terms of earnings, Q3 earnings season is underway and like Chinese exports it is already set to disappoint yet again. Some estimates for S&P 500 EPS are still stubbornly negative.

According to FactSet, analysts collectively expect S&P 500 companies’ third-quarter earnings to show a roughly 2 percent drop from the third quarter of 2015. This, according to FactSet, would represent the sixth straight quarter of year-over-year earnings declines, for the first such streak going back to the third quarter of 2008, which is when the company started collecting such data. [emphasis added]

And that is surely one of the factors playing upon market uncertainty; earnings by now “should” be growing again after so much prolonged negativity. It is this expectation for “transitory” weakness that has likely been holding stock prices largely where they are, a parallel to the economic narrative that late last year was nothing more than a close call. But as earnings contraction, like economic contraction, instead lingers still further now into the completed third quarter, the market has to really start to consider that “something” might be truly wrong with that expectation.

As I wrote several months ago, “The market appears to be waiting for earnings to ‘correct’ rather than prices.” As earnings increasingly refuse the license, markets are left contemplating that which was thought impossible; that the economy and fundamental environment as represented by earnings is at best stuck in a protracted and very real form of stagnation (I call it depression). At prices that are far too often valued comparable to only dot-com levels, this is a huge problem as investors are paying huge premiums for at best malaise. You don’t pay 20+ times earnings for a rut, those premium prices are reserved for actually rapid and inarguable growth.

It is, I believe, the possible last remnants of QE religion in stocks. Investors were willing to pay up for just the prospects for rapid growth that especially QE3 and QE4 would surely deliver. Like economists, stock holders viewed the arrival of the “rising dollar” with suspicion but still holding on to that QE-positive scenario as if only delayed by it.

The continuation of 2015 processes well into 2016 increasingly threatens those expectations. In other words, a “market” waiting for earnings to “correct” higher fulfilling if belatedly those expectations of QE effectiveness begins to understand that just isn’t very likely, then expectations start to turn toward paralysis as to what other piece of P/E might have to instead “correct” to restore much needed balance. The market seems dazed as if not wanting to believe this is possible, but accepting at least in part that though Janet Yellen still says it isn’t it really and truly is.

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The hits for Deutsche Bank just keep on coming. One day after a report that the German lender has imposed a hiring freeze in the latest bid to reassure investors that it has expenses under control and is stemming the outflow of cash, moments ago Reuters reported that Deutsche Bank’s finance chief told his staff that job cuts at the bank could be double that planned, a step that could remove 10,000 further employees.

Such cuts would likely take many years but setting such a goal could reassure investors that the bank is determined to tackle costs that sources said the European Central Bank sees as bloated. Unless, of course, they are forced to cut much faster. If 10,000 job losses were ultimately to follow the 9,000 announced by management in October 2015, roughly one in five of the bank’s workforce around the globe would be affected.

“Schenck said that the bank would need to cut another 10,000 staff to bring down costs,” said a person who attended the meeting with the chief financial officer cited by Reuters. Although no such decision has yet been taken, Marcus Schenck’s remarks, at an internal meeting, signal the lender is considering further significant cost cuts, as it faces a multi-billion-euro fine and a crisis of confidence among investors.

The discussion about further job cuts comes as Deutsche’s chief executive, John Cryan, reassesses a year-old strategy to revive the flagging group, as ebbing market confidence sends its stock price tumbling and prompts some customers to withdraw funds.. A second person familiar with these discussions said the management was also examining the countries where the bank was active to see “whether it was really worth its while (staying in those countries)”.

DB’s latest  announcement follows Commerzbank, Germany’s second biggest bank rival, which recently announced it would ax more than a fifth of its workforce – almost 10,000 staff.

Still, it is not clear if DB can achieve the cuts: given potential high severance costs and revenue losses, it remains unclear whether a further attempt by Deutsche to trim staff can be achieved. Headcount has actually risen at the bank, despite the plans announced by Cryan in October 2015 to slash staff. Employee numbers, which stood at more than 101,300 in the middle of this year, are higher than the roughly 98,600 one year earlier.

One hurdle in removing staff is that many are based in Germany, where strict labor law makes it difficult and expensive to fire employees. Of the 9,000 job cuts announced in October 2015, 4,000 are in Germany. 

In Germany, unlike Britain, for instance, labor representatives have an important say and appoint non-executive directors to Deutsche’s supervisory board. They will argue for fewer cuts.

Additionally, DB’s layoffs are getting to the point where it is now cutting into the muscle, and any additional terminations could result in a drop in revenue. Regardless of this, however, the heavy fine demanded by the U.S. authorities could prompt Cryan to act.

Once Germany’s only bank to go head-to-head with U.S. rivals on Wall Street, stricter regulation, rock-bottom borrowing costs and still heavy costs has squeezed Deutsche’s profits. Politicians in Germany, who are preparing for national elections in 2017, are watching developments nervously.

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“Gold Is A Great Hedge Against Politicians” – Goldman Sachs

Gold has risen another 1.7% in British pound terms this week and is 1.8% higher in euro terms and is again acting as a hedge against currency devaluations, Brexit, eurozone and heightened political and geo-political risk in the UK, EU, U.S. and most of the world.

Gold is marginally higher in dollar terms this week after surging on the open in Asia on Sunday night. Gold quickly rose 1% from $1,251/oz to $1,264/oz as China and the Shanghai Gold Exchange (SGE) began trading again after being closed for the Chinese Golden Week.

Since then gold prices moved lower despite the return of the world’s largest gold buyer – India – as seen in the return of gold premiums in the Indian gold market. Gold in dollar terms is now marginally higher for the week.

Goldman Sachs has long been the most vocal, prominent and widely quoted bear in the gold market. However, in recent weeks there is a marked change in their tune and they are now bullish on gold in the medium and long term. They are concerned about further price weakness in the short term as we run into year end but believe this will be a buying opportunity.

Goldman is now saying that the precious metal will be good to own in an environment of “political uncertainty” ahead of the November elections.

Goldman Sachs Head of Commodities Research Jeff Currie told CNBC’s “Power Lunch” this week that it is good to own gold in our current political state.

“I always like to say gold is a great hedge against politicians, and we have a lot of political risk in the market right now. So gold has a strategic purpose,” he explained.

“Why? What’s the tie between gold and politicians?” Brian Sullivan of CNBC asked Currie.

“Well, if you think about the correlation between rates and you think about when you debase a currency or weak dollar, what people gravitate to are hard assets and gold is the epitome of the hard asset,” Currie explained.

In a recent note, Goldman analysts Max Layton, Mikhail Sprogis and Jeffrey Currie wrote:

“Indeed, we would view a gold sell-off substantially below $1,250 an ounce as a strategic buying opportunity, given substantial downside risks to global growth remain, and given that the market is likely to remain concerned about the ability of monetary policy to respond to any potential shocks to growth.”

The bank also believed Chinese investment demand for gold may pick up after the current selloff, particularly from medium to long-term asset allocators.

“The potential drivers of increased Chinese physical buying include purchasing gold as a way to hedge for potential currency depreciation in the face of capital controls, and purchasing gold as a way of diversifying away from the property market, which has this year to date had a remarkable rally (with the government moving to rein in speculation and price growth),” the analysts added.

‘Peak gold‘, the largely unappreciated phenomenon of peak gold production is also another bullish fundamental factor that Goldman has written about.

Given the particularly poor caliber of politicians in office and seeking office in much of the western world today, author, political activist and intellectual George Bernard Shaw’s witty quote regarding voting for gold, rather than for politicians and governments is very apt today.

Ironically, the socialist agreed with Goldman Sachs and wrote:

“You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”

 

Gold and Silver Bullion – News and Commentary

Gold prices in India go to premium for first time this year (OilPrice)

Gold prices hold gains in Asia as China prices data stronger than seen (Investing)

Gold ticks higher as dollar, stocks markets slip (Reuters)

Irish retailers in price row with Unilever (RTE)

Putin ally tells Americans: vote Trump or face nuclear war (Reuters)

Buy gold, UBS says (BusinessInsider)

How low can the pound go? (MoneyWeek)

Great Marmite war is a sign of things to come (MoneyWeek)

Royal Air Force Pilots Ordered To Shoot Down “Hostile” Russian Jets Over Syria (ZeroHedge)

Goldman Sachs: 5 reasons sterling could fall 7% in two months (Nasdaq)

Gold Prices (LBMA AM)

14 Oct: USD 1,256.15, GBP 1,028.79 & EUR 1,140.08 per ounce
13 Oct: USD 1,258.00, GBP 1,029.93 & EUR 1,141.76 per ounce
12 Oct: USD 1,255.70, GBP 1,024.53 & EUR 1,139.05 per ounce
11 Oct: USD 1,256.40, GBP 1,021.58 & EUR 1,130.76 per ounce
10 Oct: USD 1,262.10, GBP 1,016.62 & EUR 1,129.71 per ounce
07 Oct: USD 1,255.00, GBP 1,012.91 & EUR 1,127.62 per ounce
06 Oct: USD 1,265.50, GBP 994.30 & EUR 1,131.23 per ounce

Silver Prices (LBMA)

14 Oct: USD 17.47, GBP 14.28 & EUR 15.86 per ounce
13 Oct: USD 17.59, GBP 14.40 & EUR 15.95 per ounce
12 Oct: USD 17.44, GBP 14.23 & EUR 15.83 per ounce
11 Oct: USD 17.48, GBP 14.26 & EUR 15.78 per ounce
10 Oct: USD 17.78, GBP 14.31 & EUR 15.92 per ounce
07 Oct: USD 17.33, GBP 14.01 & EUR 15.55 per ounce
06 Oct: USD 17.76, GBP 13.98 & EUR 15.88 per ounce

Recent Market Updates

– Sell Gold Now – Time To Liquidate Gold ETF, Pooled and Digital Gold
– Gold In GBP Up 43% YTD – “Massive Twin Deficits” To Impact UK Assets
– Ron Paul Says “Gold Going Up” Whether Trump Or Clinton Elected
– Gold Trading COT Report “Means Lower – Then Much Higher – Prices Coming”
– Currency Shock Sees Sterling Gold Surges 5% In One Minute “Flash Crash”
– Top Gold Forecaster: “As Quickly As Gold Fell” May “Rally Back” on Global Risks
– Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
– Deutsche Bank “Is Probably Insolvent”
– GBP Gold Rises 1.3% as Sterling Slumps On ‘Hard Brexit’ Concerns, Up 36% YTD
– Why Krugman, Roubini, Rogoff And Buffett Hate Gold
– ECB Refused “To Answer Questions” – Deutsche Bank “Systemic Threat” Is “Not ECB Fault”
– Euro “Might Start To Unravel” If Collapse Of Deutsche Bank
– Do You Really Own Your Gold?

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• China inflation relief sends stocks, dollar higher (Reuters)
• China producer prices rise for first time in nearly five years, may ease debt woes (Reuters)
• Oil rises further above $52 on tighter U.S. fuel stocks (Reuters)
• Oil From $50 Billion Kashagan Field Starts Flowing to Export (BBG)
• HP Plans Up to 4,000 Job Cuts Over Three Years (BBG)
• New Rules Make It Harder for Companies to Manage Their Cash (WSJ)
• The Sept. 11 Lawsuit Bill Is Weaker Than It Appears (BBG)
• The U.S. Election Is Driving Americans Nuts (BBG)
• Republicans weigh response with eye toward future (Reuters)
• Hershey CEO Bilbrey prepares to step down (Reuters)
• More Than 1 Million in Obamacare to Lose Plans as Insurers Quit (BBG)
• Saudi Arabia, SoftBank aim to be world’s No. 1 tech investor with $100 billion fund (Reuters)
• Obama decries ‘wild west’ media landscape (AFP)
• British banks keep cyber attacks under wraps to protect image (Reuters)
• Goldman’s Online Consumer-Lending Platform Goes Live (WSJ)
• Malaysian Fund 1MDB Linked to White House Visit (WSJ)
• Islamic State crushes rebellion plot in Mosul as army closes in (Reuters)
• Carmakers forced back to bigger engines in new emissions era (Reuters)
• Verizon Warns Yahoo That Breach Could Affect Takeover Deal (WSJ)

 

Overnight Media Digest

WSJ

– Verizon Communications Inc signaled it may demand to renegotiate its $4.8 billion deal for Yahoo Inc following the internet company’s recent disclosure of a data breach that affected more than 500 million accounts. http://on.wsj.com/2db0wuo

– Consumer-products giant Unilever Plc is raising its UK prices for everything from mayonnaise to shampoo after months of discreet increases amid a Brexit-triggered currency rout that threatens Britons’ buying power. http://on.wsj.com/2db0kLL

– Xerox Corp’s largest individual shareholder, billionaire Darwin Deason, has filed a lawsuit that seeks to block the copier and services giant from splitting itself into two public companies. http://on.wsj.com/2db0EKE

– Amazon.com Inc plans to hire 20 percent more seasonal workers for its U.S. warehouses this holiday season as some competitors have kept hiring steady. http://on.wsj.com/2db1sPo

– Samsung Electronics Co said it expects about another $3 billion in lost income from to its move to scrap the fire-prone Galaxy Note 7 phone, raising the financial impact of the crisis to the equivalent of about half of its profit last year in the mobile division. http://on.wsj.com/2db2ElZ

– RSP Permian Inc on Thursday said it agreed to acquire Silver Hill Energy Partners LLC and Silver Hill E&P II LLC for about $2.5 billion. http://on.wsj.com/2db1VS1

– HP Inc announced plans that include generating a bit less cash than analysts had anticipated in the next fiscal year while moving to further reduce the company’s head count. http://on.wsj.com/2db2Guj

– SoftBank Group Corp said Thursday that it was planning to invest in the technology sector through a fund that the Japanese internet and telecommunications conglomerate aims to make among the largest of its kind in the world. http://on.wsj.com/2db3NKp

 

FT

* Britain’s biggest retailer, Tesco, settled a pricing row with Unilever after halting online sales of goods produced by the Anglo-Dutch giant in a dispute caused by a plunge in the pound since Britons voted to leave the EU.

* European Council President Donald Tusk raised the prospect on Thursday that Britain might ultimately not leave the European Union because it would discover that any form of divorce from the EU will mean a damaging “hard Brexit”.

* HP Inc, the hardware business of former Hewlett-Packard Co, said it expects to cut about 3,000 to 4,000 jobs over the next three years, sending its shares down 1.3 percent in extended trading.

 

NYT

– Samsung Electronics Co Ltd said on Friday that it expected about $3 billion in operating profits to evaporate over the next two quarters after its decision to ditch the Galaxy Note 7 smartphone. http://nyti.ms/2e9MJ8S

– SoftBank Group Corp said it would form a new investment fund that could invest up to $100 billion in technology companies worldwide along with Saudi Arabia. http://nyti.ms/2e9N77r

– Verizon Communications Inc may seek to renegotiate its $4.8 billion purchase of Yahoo Inc’s operating business, after Verizon’s top lawyer said that the hacking of 500 million Yahoo email accounts in 2014 had materially diminished Yahoo’s value. http://nyti.ms/2e9Lu9y

– Deutsche Bank AG has instituted a company-wide hiring freeze as the lender looks to speed up efforts to reduce costs and regain investor confidence. http://nyti.ms/2e9Ozqs

 

Britain

The Times

* The billionaire Jim Ratcliffe is bidding to acquire assets in the North Sea owned by Royal Dutch Shell as his Ineos chemicals group steps up efforts to become a leading player in Britain’s struggling offshore oil industry. (http://bit.ly/2e1G8M9)

* Patients with dementia and cancer will have their access to life-extending new drugs rationed by the NHS. Health chiefs are to be given the power to delay or restrict treatments that cost the NHS more than about 20 million pounds ($24.87 million) a year, even if they are deemed good value. (http://bit.ly/2elZSv5)

The Guardian

* Unilever Plc has resolved its dispute with Tesco Plc and says well-known brands including Marmite and Ben & Jerry’s will be back on the shelves. It emerged on Wednesday that Tesco was running short of stock of a range of household brands from Marmite to Comfort fabric conditioner after a row with its major supplier. (http://bit.ly/2eaXPoG)

* More than 50 percent of Sky Plc independent shareholders have voted against James Murdoch’s reappointment as chairman. The head of the pan-European broadcaster had to rely on the support of Sky’s largest shareholder, 21st Century Fox, to win approval for his return to Sky after a four-year hiatus. (http://bit.ly/2dO6NtP)

The Telegraph

* Britain is in danger of misreading the political landscape in Europe and faces the possible loss of its reserve currency status if it fails to secure full access to the European single market, Standard & Poor’s has warned. (http://bit.ly/2dQTyfW)

* MPs are set to vote on whether former BHS owner Sir Philip Green should be stripped of his knighthood by the Queen next week. (http://bit.ly/2exhqUs)

Sky News

* Pension Protection Fund, which was BHS’ biggest creditor when it collapsed into administration, is demanding the company’s imminent liquidation in a bid to accelerate investigations into former directors. (http://bit.ly/2dmFebF)

* The ‘one size fits all’ approach to state pension access could be replaced by a system more tailored to the demands of individual professions in future. The idea is one that has been thrown open for discussion by John Cridland, the former director general of the CBI, who is leading a Government review. (http://bit.ly/2e9lxqG)

The Independent

* Demand for housing picked up in September for the first time in seven months as confidence began to recover in the wake of the Brexit vote. But conflicting data showed an alarming drop in London sales. (http://ind.pn/2dNmwcL)

 

via http://ift.tt/2dPdSdV Tyler Durden

Donald Trump raged yesterday at a West Palm Beach rally that corporate media are Clinton's most powerful weapon in getting her elected "at any price" and are "no longer involved in journalism."

Honestly, she should be locked up.

 

And likewise, the e-mails show the Clinton regime is so closely and irrevocably tied to the media organizations that she, listen to this, she is given the questions and answers in advance of her debate performance with Bernie Sanders. Hillary Clinton York Times.

 

They definitely do not do that for me. I can tell you. The e-mail show the reporters collaborate and inspire directly with the Clinton campaign on helping her win the election all over.

 

With their control over our government at stake, with trillions of dollars on the line, the Clinton machine is determined to achieve the destruction of our campaign… this has now become a great, great great movement, the likes of which our country has never been seen before. They never seen a moment like this in our country before….

 

It's one of the great political phenomenons. The most powerful weapon deployed by the Clintons is the corporate media, the press.

 

 

Let's be clear on one thing, the corporate media in our country is no longer involved in journalism. They are political special interest no different than any lobbyist or other financial entity with a total political agenda and the agenda is not for you, it's for themselves. their agenda is to elect crooked Hillary Clinton at any cost, at any price, no matter how many lives they destroy. For them, it's a war and for them, nothing at all is out of bounds. This is a struggle for the survival of our nation. Believe me.

And today, as The Wall Street Journal reports, The Donald is broadening his attack against the media to hit globalism and the Clinton Foundation by charging that Mexican billionaire Carlos Slim is part of a biased coalition working in collusion with the Clinton campaign and its supporters to generate news reports of decades-old allegations from several women.

“What they say is false and slanderous in virtually every respect,” he said at a rally in West Palm Beach, Fla., on Thursday, the day after the New York Times and other news outlets published accounts of women who said he had fondled or kissed them against their will.

 

As early as Friday, Mr. Trump is planning to claim that Mr. Slim, as a shareholder of New York Times Co. and donor to the Clinton Foundation, has an interest in helping Hillary Clinton’s campaign, according to a Trump adviser.

 

Attacking the Mexican billionaire would allow Mr. Trump to hit several targets. He could slam the “failing” New York Times, which he says had to be “rescued” by a “foreigner”—Mr. Slim, the adviser said.

 

“This is totally false,” said Arturo Elias, Mr. Slim’s spokesman. “Of course we aren’t interfering in the U.S. election. We aren’t even active in Mexican politics.” He said the contributions by Mr. Slim to the Clinton Foundation were a matter of public record.

But while that same media decried Trump's comments, it was none other than President Obama that appeared to demand press freedom be restricted. As AFP reports, Obama on Thursday decried America's "wild, wild west" media environment for allowing conspiracy theorists a broad platform and destroying a common basis for debate.

Recalling past days when three television channels delivered fact-based news that most people trusted, Obama said democracy require citizens to be able to sift through lies and distortions.

 

"We are going to have to rebuild within this wild-wild-west-of-information flow some sort of curating function that people agree to," Obama said at an innovation conference in Pittsburgh.

 

"There has to be, I think, some sort of way in which we can sort through information that passes some basic truthiness tests and those that we have to discard, because they just don't have any basis in anything that's actually happening in the world," Obama added.

His remarks came amid an election campaign that has seen Republican candidate Donald Trump repeat ideas and take on key staff from right-wing media outlets, and come just a day after Google unveils its "Fact Checking" network.

"That is hard to do, but I think it's going to be necessary, it's going to be possible," he added.

 

"The answer is obviously not censorship, but it's creating places where people can say 'this is reliable' and I'm still able to argue safely about facts and what we should do about it."

So we need "safe spaces" for you to imbibe the government-approved propaganda. And 'No'… it's not censorship when the government does it… it's for your own good!

via http://ift.tt/2dPeQqB Tyler Durden