Tag: finance

A week ago, we penned “The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed“, in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany – Deutsche Bank – what the real reason was for Germany’s gold repatriation halt after obtaining a meager 5 tons from the NY Fed:

… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn’t Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.  

It was the Netherlands.

This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China’s rate cut, is truly the biggest news of the day, as it shows that one doesn’t need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.

As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? “”It is no longer wise to keep half of our gold in one part of the world,” a DNB spokesman told Telegraaf. “Maybe it was desirable during the Cold War, but not now.”

From the source:

De Nederlandsche Bank (DNB) has adjusted its gold stock location policy and has shipped gold from the United States to the Netherlands to spread its gold stock in a more balanced way.

 

Under the previous policy, 11% of the gold stock was located in the Netherlands, 51% in the United States, with the remainder held in Canada (20%) and the United Kingdom (18%). Under the new policy, the breakdown by location is as follows: 31% in Amsterdam, 31% in New York, with the relative holdings in Ottawa and London remaining unchanged at 20% and 18%, respectively. Following this adjustment, DNB is in line with other central banks holding a greater part of their gold stock in their own countries. Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence.

 

Changing the distribution of the gold holdings across the different locations is not without precedent. From the end of the Second World War until the early 1970s, for example, DNB increased its gold reserves following the Bretton Woods Accord, mainly in New York. Since then, there have been other movements in DNB’s gold stock. The main reasons for this being the gold sales in the past few decades and the closure of the vaults of the Reserve Bank of Australia, as a result of which DNB shipped gold from Australia to the United Kingdom in 2000.

Sure enough, AP confirmed:

The Dutch Central Bank says it has recently shipped 122.5 tons of gold worth around 4 billion euros ($5 billion) from safekeeping in New York back to its headquarters in Amsterdam.

 

In a statement Friday morning the bank said that its 612.5-ton national gold reserve is now divided 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa, Canada and 18 percent in London.

 

“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country,” the bank said in a statement. “In addition to a more balanced division of the gold reserves...this may also contribute to a positive confidence effect with the public.”

This is how the Old and New gold allocation of the Dutch Central Bank look currently:

Note: the reallocation has already taken place, and is not – like Germany – subject to a 5 year period during which the NY Fed is expected to recoup the gold. So it can be done!?

As to when it was done, here is the NY Fed’s monthly reports of gold deposits by foreign entities: here we can see that while the 5 tons outflow in 2013 was most likely Germany, the recent surge in gold repatriation from Liberty 33 was the Netherlands. That said, only 57.5 tons of NY deposits gold has been officially repatriated through September, which means the October update, when it comes out, will be a doozy.

 

Some more details from the Dutch Telegraaf, google-translated:

In the vaults at the Amsterdam Frederiksplein was until recently 11% percent of the total of 612 tons of government gold. That is screwed up to 31%.

For years there were major concerns of the gold was still there. This months of almost military organized gold shipments from Manhattan DNB wants a ‘balanced’ distribution of the national gold buffer.

 

In addition, DNB expects Dutch citizens more confident that enough of our gold is in their own ‘home’ to guide the country if necessary following major crises.

 

At that effect also highlights the German Bundesbank, which are gold also partially recovered. De Nederlandsche Bank has great silence in recent months retrieved 130 tons of gold bars.

 

Last week drove armored trucks back and forth towards the Amsterdam Frederiksplein. “It is no longer wise to keep half of our gold in one part of the world,” the DNB spokesman on the massive operation with gold bars to Amsterdam says. “Maybe that was during the Cold War still desirable, not now. ”

 

In Amsterdam is recently 31% of the gold. In the vaults of New York is 31%. It remains. De Nederlandsche Bank carries no gold bars back from the protected storage in Ottawa, Canada, where 20% of the gold remains. In London, the Netherlands keeps 18% of all Dutch ‘sandwiches’ gold as nest egg.

 

Netherlands moved his gold in the past frequently. In the period after the Second World War until the early seventies the Dutch central bank bought gold to replenish its reserves. That was mainly focused on the vaults in New York, which are built to earthquakes and bomb attacks endured. Since then bought and sold DNB gold and earned it every robustly.

Another curiosity: the gold was repatriated by ship. From Dutch News:

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said. The high security reparations for the move took months.

Luckily, that particular vessel did not suffer any “boating incidents.”

And now that the Dutch have shown just how “easy” it is to repatriate one’s gold when not entangled in shifting alliances, diplomatic feuds, or suffering from “logistical problems” preventing one from collecting their gold, we wonder just how much more eager Germany or Switzerland will be to collect their own gold, or whether the Swiss November 30 referendum will decide to let countries like the Netherlands have a right of first refusal of whatever gold may still be held at the vault located 90 feet below street level at the New York Federal Reserve Bank (which as we reported a year ago, is connected by an underground tunnel to the JPMorgan precious metal which was located just across the street).

via Zero Hedge http://ift.tt/1z2FWN0 Tyler Durden

First Mario Draghi made some strong statements speaking in Asia that "it is essential to bring back inflation to target and without delay," which sent EURUSD tumbling BUT did not spark moves in the S&P 500 (though Gold slipped). It was not until the PBOC cut rates (and sent AUD surging) that the US equity market perked up and started ripping… along with gold and as the morning progressed, gold has kept going as it is clear the Central Banks of the world have only one policy left… (no wonder the Dutch want their gold back)

 

 

It appears that while Draghi's comments impacted European stocks (DAX surged)…

 

it had negligible impact on US stocks… they were driven by AUDJPY after the PBOC cut

 

Charts:Bloomberg

via Zero Hedge http://ift.tt/1vvOqhV Tyler Durden

Once again, Zero Hedge was just a bit ahead of its time. From September 22:

Moat? RT @fiatcurrency: Snipers, Guards, Fences Not Enough: Secret Service Mulls Security Checkpoints Outside WH http://t.co/Vou49LA68M

— zerohedge (@zerohedge) September 22, 2014

And now, fast forward to today, and this submission by Mike Krieger via Liberty Blitzkrieg blog,

What has been occurring over the past several years is not a recovery, rather, it’s a painful transition of the U.S. into a neo-feudal society. Earlier this week in the post, Welcome to the Recovery – U.S. Child Homelessness Hits Record as Poverty in Mass. is Highest Since 1960, I wrote:

While the general population is aware something is seriously wrong, people remain extremely confused about the root of the problem. This is because what’s happening all around us isn’t socialism and it isn’t free market capitalism. It is actually a return to something much more ancient and much more oppressive. It is a return to serfdom, neo-feudalism and oligarchy.

Well now we have definitive proof. It can’t get any more in your face than this.

From MarketWatch:

WASHINGTON (MarketWatch)—Faced with an increasing number of White House intrusions that led to the resignation of a Secret Service director, a congressman on Wednesday suggested that maybe a moat should be erected around the president’s home.

 

The suggestion was made by Rep. Steve Cohen, a Tennessee Democrat, at a House Judiciary Committee hearing.

 

With hand gestures, Cohen suggested a moat roughly six-feet wide may be “attractive” and “effective.”

 

Joseph Clancy, the acting director of the Secret Service, didn’t dismiss the suggestion out of hand.

 

“Sir, it may be,” he said. Clancy said the Secret Service and the National Park Service were discussing ways to ensure security along with access to the White House for the American people.

In case you aren’t familiar with Steve Cohen, I covered his fascist tendencies in the past. Recall the post: Rep. Steve Cohen Calls Tea Party Republicans “Domestic Enemies” on MSNBC.

Here’s the moat clip:

We wonder where he got that idea from?

Moat? RT @fiatcurrency: Snipers, Guards, Fences Not Enough: Secret Service Mulls Security Checkpoints Outside WH http://t.co/Vou49LA68M

— zerohedge (@zerohedge) September 22, 2014

Enjoy your serfdom!!

 

via Zero Hedge http://ift.tt/1uW6Mat Tyler Durden

Recent polls show pro-default parties growing popular in peripheral euro-area countries such as Greece, Italy and Spain. As Bloomberg Brief's Maxime Sbaihi notes, in a depressed economic environment, their promises to restructure public debt might soon bring them to power and tempt traditional parties to adopt their ideas. This return of political risk in the euro area doesn’t appear to be priced in by market participants. As Italy's Beppe Grillo recently exclaimed, "we will leave the Euro and bring down this system of bankers, of scum."

 

 

One of these countries could trigger a new euro-area political crisis and affect the others through contagion. Market participants are focused on the European Central Bank and may be overlooking that prospect.

*  *  *

As Martin Armstrong asks rather pointedly…

Since the introduction of the euro, all economic parameters have deteriorated, the founder of the five-star movement in Italy is absolutely correct. The design or the Euro was a disaster. There is no fixing this any more. We have crossed the line of no return. Beppe is now calling for referendum on leaving euro. Will he be assassinated by Brussels? It is unlikely that the EU Commission will allow such a vote.

*  *  *

Source: Bloomberg Briefs

via Zero Hedge http://ift.tt/1uiJXst Tyler Durden

• They go all in: China’s PBOC Cuts Interest Rates for First Time Since 2012 (BBG)
• And all in-er: ECB’s Draghi throws door to quantitative easing wide open as recovery wanes (Reuters)
• Global Markets Rally: ECB Head Says Central Bank Is Ready to Expand Stimulus Program After China Cuts Rates (WSJ)
• Obama unveils U.S. immigration reform, setting up fight with Republicans (Reuters)
• U.S. increasing non-lethal military aid to Ukraine (Reuters)
• Russia warns U.S. against arms to Ukraine as Biden due in Kiev (Reuters)
• Ukraine slashed gold holdings in October, Russia added more – IMF (Reuters)
• Abe Dissolves Japan’s Lower House of Parliament (WSJ)
• In blow to Cameron, Britain’s UKIP wins second parliamentary seat (Reuters)
• Distressed Debt in China? Ain’t Seen Nothing, DAC Says (BBG)
• Citigroup Said to Be Ousted From ECB FX Group for Rigging (BBG)
• Sotheby’s CEO to Step Down (WSJ)
• More arrests as protesters await Ferguson grand jury decision (Reuters)
• Finally, a New Clue to Solve the CIA’s Mysterious Kryptos Sculpture (Wired)

 

Overnight Media Digest

WSJ

* U.S. President Barack Obama announced Thursday that millions of illegal immigrants will gain protection from deportation, under a plan that bypasses Congress and which could unleash unpredictable political and economic forces. (http://on.wsj.com/1BSgbVA)

* The Federal Reserve launched a sweeping review of how it supervises big banks. The Fed said the review is focused on whether senior staff are given enough information when making decisions affecting the largest financial firms, including “whether channels exist for decision makers to be aware of divergent views”. (http://on.wsj.com/1uGbYOe)

* Chief Executive William Ruprecht is leaving Sotheby’s , months after hedge-fund activist Dan Loeb and several others joined the auction house’s board. The company said the departure was by mutual agreement with the board, which took a hard look at the company’s senior management in August. (http://on.wsj.com/1Aqf5Pg)

* Takata Corp, the air-bag supplier at the center of a massive recall involving millions of vehicles, knew one of its air bags exploded as early as May 2005 but didn’t investigate it further or warn auto makers of a potential defect until two years later. (http://on.wsj.com/1vukToN)

* Alibaba Group Holding Ltd, the Chinese e-commerce company, has emerged as this year’s biggest source of fees for banks working on capital-markets deals. After its initial public offering in September, the largest in history, the company on Thursday sold $8 billion in bonds, one of the largest corporate-bond deals of the year. (http://on.wsj.com/1qDgY8d)

* Federal authorities are investigating whether casino operator Wynn Resorts Ltd violated money-laundering laws, according to people familiar with the matter. Wynn will be the third major Las Vegas casino company in recent years known to be investigated for possible violations of money-laundering laws. (http://on.wsj.com/11AkML5)

* Valeant Pharmaceuticals Inc is launching a new $2 billion securities repurchase program, just days after losing its bid to buy Botox maker Allergan Inc to Actavis Plc . Under the program, which begins Friday, Valeant can buy back its senior notes, common shares and other securities. (http://on.wsj.com/1xvIEfR)

 

FT

UK Independence party leader Nigel Farage said his party was going to win the seat in the Rochester and Strood by-election on Thursday night as the Tories braced themselves for a possible upheaval in the wake of the election of Ukip’s second member of parliament.

Britain’s Finance Minister George Osborne on Thursday night withdrew his bid to overturn the EU banker bonus cap, saying he would focus on reforming global rules on pay rather than wasting more money on a hopeless lawsuit.

Boris Johnson, the Conservative mayor of London, admitted to being pursued by the US authorities for an unpaid tax demand.

Swiss chemicals group Ineos has entered the race to develop UK reserves of shale gas, announcing its plans on Thursday to spend $1 billion on exploration in coming years.

 

NYT

* Goldman Sachs Group Inc executives spent Thursday locked in a testy public face-off with members of Congress, fighting suggestions that the bank had taken too large a role in the commodities market. (http://nyti.ms/1x8jNuG)

* British regulators fined the Royal Bank of Scotland for about $88 million, on Thursday over a technology failure that left millions of customers unable to access their accounts for several weeks in 2012. (http://nyti.ms/1t9ihad)

* Airbus Group NV scored a big victory over Boeing Co on Thursday when Delta Air Lines Inc said it would buy 50 new planes from Airbus, including its newest long-range A350 aircraft. (http://nyti.ms/1uGFTpr)

* NRG Energy Inc, which built a leading electricity business from coal and other conventional power plants, is aiming to reduce its carbon emissions 50 percent by 2030 and 90 percent by 2050, the company said on Thursday. (http://nyti.ms/11xFA5Y)

* Technip of France said on Thursday that it had approached CGG SA, an oil services company, about a potential takeover and offered to acquire the smaller company for about $1.8 billion. (http://nyti.ms/1v0bnIG)

 

China

CHINA SECURITIES JOURNAL

– China is aiming to overhaul its rural land transfer systems within the next five years, the newspaper reported, citing a joint statement from China’s Central Committee and the State Council, China’s cabinet.

SECURITIES TIMES

– The State Council has rolled out a series of measures to help smaller companies amid a slowing economy, including extra financial support, lower taxation and establishing information sharing platforms.

SHANGHAI SECURITIES NEWS

– China’s securities regulator is probing PKU HealthCare Corp Ltd, a healthcare group linked to the prestigious Peking University, for violating securities regulations, according to a filing from the company.

CHINA DAILY

– China will unveil new standards for air purifiers on Friday to better regulate a market which is booming as consumers grow increasingly concerned about hazardous levels of air pollution, the Standardization Administration said on Thursday.

– A court in the autonomous region of Inner Mongolia plans to reopen a two decades-old trial of a teenager who was executed in 1996 for rape and murder. The case was fast tracked at the time despite doubts over the evidence.

SHANGHAI DAILY

– Shanghai has increased protection for consumers buying products online, the Shanghai People’s Congress ruled on Thursday. China’s e-commerce market boom is forcing regulators to adapt rules to keep up.

PEOPLE’S DAILY

– Solving land issues affecting China’s farmers is critical to the country’s wider reform, the paper which acts as a mouthpiece for the ruling Communist Party, said in a commentary.

Britain

The Times

Police struggle to trap tech-savvy terrorists

The ability of Britain’s intelligence chiefs to monitor the terrorist threat is at its lowest level for a decade, according to the country’s most senior anti-terrorism policeman.

(http://thetim.es/1tmXu28)

IT staff pay price for computer fiasco that locked RBS customers’ accounts

The staff responsible for an IT glitch that left millions of RBS, NatWest and Ulster Bank customers unable to access their accounts have shouldered about one-tenth of a 56 million-pound ($87.9 million) fine slapped on Royal Bank of Scotland yesterday.

(http://thetim.es/1ugmJTI)

The Guardian Chancellor George Osborne backs down over EU cap on bankers’ bonuses

Chancellor George Osborne has conceded defeat in his attempt to overturn the EU cap on bonuses after a senior legal advisor at the European Court of Justice rejected his arguments.

(http://bit.ly/1x76A55)

Former JJB Sports boss convicted of taking 1 mln stg in backhanders

Chris Ronnie, the former boss of JJB Sports Plc, faces up to five years in jail, after being found guilty of accepting more than 1 million pounds ($1.57 million) in payments from suppliers.

(http://bit.ly/1xv9u7P)

The Telegraph RBS hit with 56 mln stg fine for IT breakdown

Royal Bank of Scotland has pledged that a repeat of the IT disaster that left millions of customers unable to make payments is extremely unlikely after the bank was hit with a 56 million-pound fine.

(http://bit.ly/1r28d1O)

Wonga chief executive departs after six months in the job

Tim Weller, the interim chief executive officer of loan company Wonga, has left the consumer loans business six months after he took over from former chief executive Niall Wass, who himself lasted just six months in the role.

(http://bit.ly/1Amx3SJ)

Sky News Shop Prices Fall at Fastest Pace Since 2002

Shoppers are on course to bag some bargains in the run up to Christmas, with prices falling at their quickest pace since 2002 in October.

(http://bit.ly/1yvLr78)

British Gas Predicts Lower Bills This Year

British Gas is predicting its average dual fuel bills to be 100 pounds lower per household this year, largely because of warmer weather.

(http://bit.ly/1xWPjQ4)

The Independent Ineos announces $1 bln investment in UK fracking exploration

Chemicals giant Ineos has set out plans to invest up to $1 billion (640 million pounds) into shale gas production in the UK – putting it at the centre of the country’s nascent fracking plans.

(http://ind.pn/1r2dSoJ)

UK retail sales jumped in October as shoppers go bargain hunting

Retailers got an early boost in the run-up to Christmas as shoppers threw caution to the wind in October, official figures showed.

(http://ind.pn/11I6mJR)

 

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Kansas City Fed manufacturing index for November at 11:00–consensus 6

ANALYST RESEARCH

Upgrades

Best Buy (BBY) upgraded to Outperform from Market Perform at Telsey Advisory
BlackRock (BLK) upgraded to Outperform from Market Perform at Bernstein
Cerner (CERN) upgraded to Outperform from Market Perform at Cowen
Community Health (CYH) upgraded to Outperform from Market Perform at Raymond James
Lockheed Martin (LMT) upgraded to Neutral from Sell at UBS
Manchester United (MANU) upgraded to Overweight from Neutral at JPMorgan
Teekay Offshore Partners (TOO) upgraded to Buy from Neutral at Citigroup
Trinity Industries (TRN) upgraded to Buy from Neutral at Longbow
Zebra Technologies (ZBRA) upgraded to Overweight from Neutral at JPMorgan

Downgrades

Aerohive (HIVE) downgraded to Neutral from Outperform at Macquarie
Alliant Energy (LNT) downgraded to Hold from Buy at Wunderlich
AmerisourceBergen (ABC) downgraded to Market Perform from Outperform at FBR Capital
Dillard’s (DDS) downgraded to Neutral from Buy at BofA/Merrill
eBay (EBAY) downgraded to Sell from Hold at Evercore ISI
Fiserv (FISV) downgraded to Equal Weight from Overweight at Barclays
Franklin Resources (BEN) downgraded to Market Perform from Outperform at Bernstein
GameStop (GME) downgraded to Market Perform from Outperform at Telsey Advisory
Macerich (MAC) downgraded to Equal Weight from Overweight at Morgan Stanley
Macerich (MAC) downgraded to Hold from Buy at KeyBanc
Wesco Aircraft (WAIR) downgraded to Equal Weight from Overweight at Barclays
WuXi PharmaTech (WX) downgraded to Hold from Buy at Jefferies

Initiations

ADP (ADP) initiated with a Sell at Topeka
Adobe (ADBE) initiated with a Buy at Jefferies
Amazon.com (AMZN) initiated with a Buy at Nomura
Arlington Asset Investment (AI) initiated with an Outperform at FBR Capital
Benefitfocus (BNFT) initiated with a Buy at Jefferies
CA Technologies (CA) initiated with a Buy at Jefferies
Caterpillar (CAT) initiated with a Buy at Stifel
Check Point (CHKP) initiated with a Buy at Jefferies
Ctrip.com (CTRP) initiated with an Overweight at HSBC
FMC Technologies (FTI) initiated with a Buy at Citigroup
Intuit (INTU) initiated with a Buy at Jefferies
Jefferies says new Microsoft (MSFT) looks like old, starts with Underperform
Microsoft (MSFT) initiated with an Underperform at Jefferies
MoneyGram (MGI) initiated with a Neutral at Compass Point
National Oilwell (NOV) initiated with a Neutral at Citigroup
Oracle (ORCL) initiated with a Hold at Jefferies
Paychex (PAYX) initiated with a Sell at Topeka
Paycom (PAYC) Software initiated with a Buy at Jefferies
Qlik Technologies (QLIK) initiated with a Buy at Jefferies
Qunar (QUNR) initiated with a Neutral at HSBC
Red Hat (RHT) initiated with a Hold at Jefferies
RingCentral (RNG) initiated with a Buy at Jefferies
SAP (SAP) initiated with a Hold at Jefferies
SS&C Technologies (SSNC) initiated with a Buy at Jefferies
Salesforce.com (CRM) initiated with an Underperform at Jefferies
SolarWinds (SWI) initiated with a Buy at Jefferies
Splunk (SPLK) initiated with a Buy at Jefferies
Symantec (SYMC) initiated with an Underperform at Jefferies
Tableau (DATA) initiated with a Hold at Jefferies
VMware (VMW) initiated with a Buy at Jefferies
Varonis (VRNS) assumed with a Buy at Jefferies
Western Union (WU) initiated with a Neutral at Compass Point
Xoom (XOOM) initiated with a Sell at Compass Point
ZAIS Financial (ZFC) initiated with an Outperform at JMP Securities

COMPANY NEWS

Sotheby’s (BID) CEO William F. Ruprecht to step down by mutual agreement with the board. Ruprecht, who has served as CEO since 2000, will continue
as Chairman, President and CEO until his successor is in place
Hertz (HTZ) named John P. Tague as President, CEO
Yum! Brands (YUM) authorized up to $1B in share repurchases 
PS Fund 1 sold 2.24M Allergan (AGN) shares allocated to Valeant USA (VRX)
Rolls-Royce (RYCEY) wins $5B Trent order for 50 aircraft from Delta Air Lines (DAL) (EADSY)
Starwood (HOT) declared special dividend of 65c per share

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Sirona Dental (SIRO), Hibbett Sports (HIBB), Aruba Networks (ARUN), Zoe’s Kitchen (ZOES), Mentor Graphics (MENT), Splunk (SPLK), Autodesk (ADSK), Haynes (HAYN), Ross Stores (ROST), Intuit (INTU)

Companies that missed consensus earnings expectations include:
Geospace (GEOS), Amtech Systems (ASYS), Wesco Aircraft (WAIR), The Fresh Market (TFM), GameStop (GME)

Companies that matched consensus earnings expectations include:
Marvell (MRVL)

NEWSPAPERS/WEBSITES

CBS (CBS) consents to short term extension on DISH (DISH) negotiations, Bloomberg reports
Intel (INTC) may not reach goal of shipping 70M tablet chips next year, Re/code reports
Amazon (AMZN) lease hints at same-day shipping, brick-and-mortar ambitions, WSJ says
Goldman Sachs (GS) denies manipulating commodities, Reuters reports
Boeing (BA) has no plans for long-range 737 MAX, Reuters reports
Amazon (AMZN) could launch travel service, Skift reports

SYNDICATE

Ashford Hospitality Prime (AHP) files to sell 8.8M units for limited partners
BGC Partners (BGCP) files to sell 20M shares of Class A Common Stock
Castle Brands (ROX) files to sell $10M in common stock
Celsus Therapeutics (cltx) files to sell $46M in common stock
Lexicon (LXRX) 49.751M share Spot Secondary priced at $1.005
New York Mortgage (NYMT) files to sell 15M shares of common stock
On Track Innovations (OTIV) 6.25M share Spot Secondary priced at $1.60
On Track Innovations (OTIV) files to sell common stock
Perrigo (PRGO) 5.92M share Secondary priced at $152.00
TCP Capital (TCPC) files to sell 5.9M shares of common stock

via Zero Hedge http://ift.tt/1AsgbKj Tyler Durden

While the biggest news of the day will certainly be China’s rate cut (and the Dutch secret gold repatriation but more on the shortly), here is a list of all the other central-banking events which have moved markets overnight, because in the new normal it no longer is about any news or fundamentals, it is all about the destruction of the value of money and the matched increase in nominal asset values.

As RanSquawk recounts, European equities opened in the green in a continuation of the Wall Street close and positive performance overnight in Asia-Pacific equities with little else in the way of macro newsflow to dictate the price action. However, this subdued start to the session was short-lived as ECB’s Draghi took the stage in Frankfurt and presented an increasingly dovish tone. More specifically, the ECB head said the inflation situation in the euro area has become increasingly challenging and will seek to raise inflation as fast as possible, with participants taking these as comments as one of the clearest indications yet that an ECB QE programme is increasingly likely. This subsequently saw European stocks surge higher with gains in excess of 1% amid hopes of further liquidity while Bunds staged a fast-money move higher to print session highs and the Euribor strip was also seen bid following the dovish rhetoric. On a stock specific basis in Europe this morning, newsflow remains relatively light. However, energy and basic material names lead the way higher alongside the recent modest recovery seen in commodity prices.

Overnight Buletin Headlines form Ransquawk and Bloomberg

• European price action has been largely controlled by particularly dovish rhetoric from ECB’s Draghi.
• As such EUR/USD prints a weekly low, while European equities enter the North American crossover firmly in the green.
• Looking ahead, today’s session sees a lack of tier 1 US data, with Canadian CPI the main event.
• Treasuries headed for second consecutive weekly loss amid gains for stocks, surge in corporate issuance including Alibaba’s $8b, largest USD- denominated sale by an Asian issuer.
• China cut interest rates for the first time since July 2012,    lowering the 1-year deposit rate to 2.75% from 3.00% and the    one-year lending rate by 0.4ppt to 5.6%
• Draghi said the ECB must drive inflation higher “as fast as possible,” and will broaden its asset-purchase program if needed to achieve that
• Japan’s finance chief said the yen has been weakening too fast over the past week, the strongest statement yet by one of the nation’s top policy makers as the central bank’s expanded stimulus drives down the exchange rate
• Obama lifted the immediate threat of deportation and opened the way to better jobs for about 5m undocumented immigrants, thrusting a long-simmering fight to the forefront as he takes on a Republican-controlled Congress
• The U.S. health secretary, Sylvia Mathews Burwell, said her agency made a mistake when it added dental-plan customers to recent figures on Obamacare enrollment.
• Russia is seeking to build a high-speed rail link to further bolster ties with China after agreeing on the biggest natural gas supply deal in history
• The U.K. Independence Party dealt a new blow to Prime Minister David Cameron as it won a second seat in Parliament from his Conservatives in six weeks
• U.S. prosecutors are seeking to settle criminal currency- rigging cases with multiple banks at the same time, allowing lenders to avoid being singled out for industrywide conduct, according to people familiar with the matter
• Sovereign yields lower. Asian stocks gained. European stocks, U.S. equity-index futures higher. Brent crude, gold gain; copper falls

US Event Calendar

• 11:00am: Kansas City Fed Manufacturing Activity, Nov., est. 6 (prior 4)
• 10:00am: Senate subcommittee hearing on New York Fed

FX

In terms of FX moves, until the PBOC shocker just before 6 am eastern time, the comments from Draghi have dictated a bulk of the price action, with EUR/USD breaking back below 1.2500. This subsequently provided USD with a strong bid which lifted USD/CHF and subsequently saw EUR/CHF reach its highest level in 9 days, with some also citing SNB intervention alongside the move in the cross. Elsewhere, overnight, USD/JPY was dragged lower following the pair failing to break above 119.00 yesterday, with the move to the downside exacerbated by comments by Japanese Fin. Min. Aso who said the speed of JPY weakening has been too fast, with this move also resulting in heavy selling in EUR/JPY and GBP/JPY. Once the PBOC hit the tape, the AUD soared against all pairs, and as a result lifted all AUDJPY carry driven trades, which as we showed yesterday, was the key correlation pair for E-Mini algos, thus sending the S&P to new all time highs.

COMMODITIES

Elsewhere, the commodity complex has been particularly subdued. Early in the European session spot gold failed to break above USD 1,200 before being dragged further away from the handle following the broad-based USD strength. WTI and Brent crude futures enter the North American crossover in modest negative territory with participants looking ahead to the OPEC meeting, ahead of which analysts at Commerzbank said OPEC are unlikely to cut 30mln bpd target next week, while SocGen sees Saudi Arabia leading 1mln b/d to 1.5mln bbd OPEC cut.

* * *

DB’s Jim Reid concludes the overnight news recap

Yesterday was certainly a day for the data-watchers with a host of prints across Europe and the US. The result was, perhaps unsurprisingly, a mixed bag and continues the theme we’ve seen recently with less than encouraging PMI prints out of Europe in the morning being met with a generally solid set of releases in the US in the afternoon. Starting in the US, CPI came in modestly ahead of consensus as the flat mom October CPI headline print was a tad above the -0.1%mom expected, whilst the core reading showed further acceleration to +0.2%mom (+0.1%mom expected) from +0.1% previously. Our US economists interestingly pointed out that the continually deflating goods prices recently have been offset by ongoing gains in services prices – this in turn has raised the core inflation print by a tenth to 1.8% in year-over-year ended terms.

Looking further ahead, our colleagues expect that it’ll be difficult for core inflation to move lower given that core services prices accounts for a chunky 75% of overall core CPI inflation. With core goods prices moving lower as a result of a significant deceleration in non-petroleum import prices, we’ve seen core goods decline year-over-year since April 2013. On the other hand core services prices have consistently grown well above +2.0% for the last three years (with the current run rate at +2.5%). This is largely as a result of shelter costs that we mentioned yesterday which have once again risen in October to a +3.1% yoy growth rate, now a recession high. Given the expected further decline in the rental vacancy rate, we should see shelter costs continue to rise in the near term which should offset any downwards goods sector pressure and hold inflation above 2%. All-in-all the divergence in the two factors of CPI highlights the current inflationary conditions in the US and is worth keeping a keen eye on as we move through 2015.

Away from the CPI readings, there were further positive prints in the housing market with existing home sales increasing 1.5%mom, ahead of expectations of a small decline. As well as this, the Philadelphia Fed survey was Strong with the solid 40.8 reading up from 20.7 in October. Claims were largely mixed although the flash manufacturing PMI was the slight blip in an otherwise encouraging day for the region with a 1.2pt fall to 54.7 weaker than expected. Finally October’s leading index showed a +0.9%mom rise, ahead of consensus.

Looking at how the market reacted, the +0.20% close in the S&P yesterday somewhat hides the +0.6% bounce off the lows, closing just shy of Wednesday’s record highs. Treasuries weakened modestly with the curve some 2-3bps wider whilst the Dollar closed down slightly weaker (DXY -0.06%).

Before all this yesterday, there was little for the market to get encouraged about in Europe following disappointing PMI’s. The Eurozone November flash print of 51.4 was materially down on expectations of 52.4 and last month’s 52.1 reading. However, this is largely explained by a drop in the German composite to 52.1 (54 expected) from 53.9 previously and comes after what had been an encouraging recent ZEW survey. Just on the German reading, the most disappointing reading was perhaps a fall in the services index to 52.1 from 54.4, marking the lowest level since July 2013. The weakness in these numbers backs up our German economists’ view that GDP is set to stagnate through the next two quarters with the potential for a risk of a negative quarter. Away from Germany, France didn’t fare much better with the composite coming in below expectations at 48.4 (vs. 48.7), although the services print improved from Octobers reading. Looking forward, our European economists see the overall PMI outcome consistent with their GDP growth call in 2015 of +0.8% as well as providing further strength around the argument that that the ECB will have to include government bonds in its QE programme to meet its inflation target. Over the last few weeks of touring round Europe its been noticeable how sentiment has changed towards QE. Two months ago at the start of my recent travels, most people were still skeptical that the ECB could ever sanction Government bond QE. Fast forward to the present day and the vast majority think it’s an inevitability.

In terms of market reaction in Europe yesterday, 10yr Bunds closed some 5bps wider whilst the Stoxx 600 (-0.26%) and DAX (+0.12%) initially weakened some -0.9% post PMI’s only to rally into the close following the better sentiment out of the US. Credit markets largely reflected the equity moves, Xover closing some 4.5bps wider on the day.

Whilst on the subject of credit markets, the latest weekly fund flows are in. A look at the HY mutual fund flow numbers shows that the past week saw further outflows in Europe (-$143mn or -0.3% of NAV). We have now seen just one week of inflows in the past eight with 15 of the past 19 weeks seeing outflows. Net outflows over the 19 weeks have totaled $4.1bn (around 10% of NAV). US HY funds also saw outflows over the past week (-$809mn or -0.3% of NAV) breaking a streak of four consecutive weeks of inflows. Overall it does seem that flows have stabilised but we probably need inflows to encourage fund managers to exploit the wider and quite attractive levels – especially those in Europe. Maybe the US small set back is not being helped by the continued Energy sector concerns.

Just wrapping up the data prints yesterday, industrial orders out of Italy came in weaker than expected (-1.5% mom vs. -1.0% mom expected) although October retail sales in the UK surprised to the upside. The headline print including auto’s came in at +0.8% mom (vs. +0.3% mom expected and -0.3% previously) whilst the core reading (excluding auto’s) was above market at +0.8% mom. Finally, DB’s George Buckley noted that the picture painted by the UK’s CBI survey painted something of a mixed picture, with two key forward-looking activity measures in expected output and total orders – moving in opposite directions.

Elsewhere, Bloomberg has reported that the ECB has put together the necessary requirements to start purchasing ABS from as soon as today. This follows on from earlier comments from ECB member Mersch who commented that the central bank may start purchasing the securities this week. Rounding out central bank news, SNB board member Zurbruegg has defended the national banks cap of 1.20 to the Euro whilst commenting that the bank won’t hesitate to enact supplementary measures.

Before we look at the day ahead, markets in Asia this morning are generally firmer. In particular Japan appears to be trading well ahead of the anticipated dissolving of the lower house today. The Nikkei is currently +0.36% higher whilst the JPY has strengthened +0.21% versus the Dollar to 117.96 buoyed somewhat by comments from the Finance Minister that the currency’s decline had been too fast. Elsewhere bourses in China, Korea and Hong Kong are +0.76%, +0.35% and +0.19% better respectively as we go to print.

In terms of the day ahead, after yesterday’s raft of data releases the market could get something of a breather today with just the Kansas City Fed manufacturing index in the US to look forward to after we get public finances data in the UK and hourly wages out of Italy. Perhaps of more interest however, we will hear from both the ECB’s Draghi (commenting on ‘Reshaping Europe’) and Nouy (commenting on Banking and Regaultion) this morning as well as the Fed’s Williams later so we will keep an eye out for anything interesting.

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Moments ago, as traditionally is the case, the Chinese central bank caught the world by surprise and cut rates, notably the deposit rate by 25 bps and the lending rate by 40 bps.

According to the press release posted moments ago (google translated):

The People’s Bank of China decided to cut financial institutions RMB benchmark interest rate loans and deposits with effect from November 22, 2014. The one-year benchmark lending rate down 0.4 percentage points to 5.6%; one-year benchmark deposit rate down 0.25 percentage point to 2.75%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.1 times the adjusted interest rate is 1.2 times; other grades adjusted accordingly benchmark interest rate loans and deposits, and to make appropriate benchmark interest rate maturities degenerate.

The summary table:

This happens as many analysts had been calling for more easing from China for months to help stabilize the faltering economy, but also happens a day after as Bloomberg reported, “Distressed Debt in China? Ain’t Seen Nothing, DAC Says.” Bascially well over a year after promising deleveraging reforms and a lower trendline growth rate, one which would not see incremental monetary stimulus, Xi Jinping threw in the towel and joined Japan and Europe in aggressively pursuing greener grass. It also means that, as expected, China is now clearly paying attention to Japan’s unprecedented currency destruction and as Albert Edwards noted a few weeks ago, it is now only a matter of time before China devalues its currency outright.

The good news for the liquidity addicts, is that the S&P futures are now 12 points higher on what is clearly the only growth strategy left in a centrally-planned world, and are approaching 2070 and just 30 points away from Goldman’s 2015 year end target.!

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Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The interesting thing about America in 2014, is that the worship of our own domestic criminals just doesn’t cut it anymore. In order to ensure our celebration of corruption is crystal clear to the entire planet, our “leaders” have eagerly opened the floodgates to criminals from all over the world. The most recent focus has targeted corrupt Chinese officials and their children, which makes sense as China is cracks down on corruption. While capital moves to where it is treated best, apparently so does criminality.

I have been highlighting this trend all year, with the post: Open the Floodgates – Chinese Inquiries on U.S. Real Estate Soar 35% After Easing of Visa Rules, being the latest. In that piece, we learned that:

Chinese inquiries about real estate investment in the United States surged 35 percent this week after the two countries agreed to extend the terms of short-term visas, China’s top international property portal said on Friday.

This is a win-win for the corrupt establishment. Housing prices continue to go up, which benefits the financial oligarchs who poured billions into real estate only to find out they killed the buy-to-rent trade in the process as impoverished Americans can barely afford leases anymore. It also benefits University Administrators, who wish to continue jacking up tuition but are running into a serious problem: American youth a flat broke. No worries, just import foreigners to fill the gap.

Don’t take it from me though. The Wall Street Journal published a post titled: U.S. Graduate Schools Rely More on Asia. Here are some excerpts:

Applications to U.S. graduate schools from Asia, led by India, have jumped in recent years, but total enrollment at programs has only inched up as mounting debt appears to be suppressing the number of American applicants.

 

International students now make up 17% of all U.S. graduate students, with more than half studying engineering, science and business, according to a report to be released Wednesday by the Council of Graduate Schools. This year has seen an 8% uptick in overseas students, while enrollment from U.S. students has stayed flat, the report said.

 

Graduate-school debt may be keeping U.S. students away, said Jason Delisle, an education analyst at the New American Foundation, a left-leaning Washington think tank.

 

That debt has weighed on prospective students. Between 2008 and 2013, total graduate enrollment increased by just 0.7%, according to a 2013 report by the Council of Graduate Schools, but growth in the number of international students is up between 7% and 10% for each of the past four years.

 

That growth was fueled by Chinese students until 2012, when their numbers plateaued. In the past two years, the offers of admission to Indian students have climbed 30% and 24%, respectively.

On a related note, remember former head of the the Department of Homeland Security, Janet Napolitano, aka “Big Sis”? Well she is now President of the University of California system, and is using that position to push through a 28% tuition hike so that administrators can get huge pay raises. Bloomberg reports that:

A University of California regents committee approved a 28 percent tuition increase amid protests by as many as 400 people who stormed metal barricades and broke glass at a meeting in San Francisco.

400 hundred American slaves? So what. Talk to the Maserati.

The full board is scheduled to vote tomorrow on the plan, which would end a three-year tuition freeze at the 10-campus system. The proposal set UC President Janet Napolitano, 56, the former secretary of Homeland Security, at odds with Governor Jerry Brown, a 76-year-old Democrat who won election to an unprecedented fourth term this month.

 

The plan calls for raising tuition as much as 5 percent annually for five years. The increase would push undergraduate tuition to $15,564 a year by 2019 from $12,192 now.

 

Napolitano’s tuition proposal comes two months after the regents approved pay increase of as much as 20 percent for four chancellors and increased the base salary for a new chancellor by 23 percent from his predecessor, said Lieutenant Governor Gavin Newsom, who is an ex-officio member of the board.

 

“The University of California can’t bestow pay raises on its top earners with one hand, while continually taking more from students and their families with the other and deflecting criticism by laying its solution at the door of taxpayers,” Newsom said.

Sure they can. Just enroll more foreign students who can actually pay. American plebs lose again.

Here are some additional articles on how U.S. officials are welcoming criminal Chinese funds into the states:

Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash

Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering

Zillow Opens the Floodgates to Chinese Buyers in Order to Keep Housing Bubble 2.0 Inflated

Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate

With all that in mind, watch the video below. While it’s certainly not the fault of these “students,” it’s nevertheless very concerning to see a kid with barely any peach fuzz on his face talking about how he owns three Ferraris. Where did this money come from? Nobody seems to care as long as the status quo gets paid.

We should just get it over with an change the words on the base of the Statue of Liberty. I propose:

Give me your corrupt, your crony, your oligarch masses yearning to launder money free,

 

The criminal masterminds of your destroyed environment and police state.

 

Send these, the pampered, the private jet setter to me, I open my hands to your golden yuan.

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The impossible is possible. Never say never. Wall Street bankers are staring agog at headlines coming from Europe where, in Iceland, the former chief executive of one of the largest banks in the country which was involved in crashing the economy in 2008 has been sentenced to jail time. As Valuewalk reports, in receiving a one year prison sentence, Sigurjon Arnason officially became the first bank executive to be convicted of manipulating the bank’s stock price and deceiving investors, creditors and the authorities between Sept. 29 and Oct. 3, 2008, as the bank’s fortunes unwound, crashing the economy with it. It appears he was as shocked by the verdict as Wall Street-ers are, “this sentence is a big surprise to me as I did not nothing wrong.” It was likely all for the people’s own good…

 

 

Via ValueWalk,

Some thought it would never happen. But in Iceland, the former chief executive of one of the largest banks in the country which was involved in crashing the economy in 2008 has been sentenced to jail time.

 

Iceland banker the first to manipulate bank’s stock price

 

In receiving a one year prison sentence, Sigurjon Arnason officially became the first bank executive to be convicted of manipulating the bank’s stock price and deceiving investors, creditors and the authorities between Sept. 29 and Oct. 3, 2008, as the bank’s fortunes unwound, crashing the economy with it.  Landsbanki was one of three banks that had tallied nearly $75 billion in debt before the final curtain was drawn.

 

What, me guilty? was the bank executive’s response upon learning of his fate. “This sentence is a big surprise to me as I did not nothing wrong,” Arnason was quoted as saying in a Reuters article after he learned of his punishment.  Amason had not decided if he was going to appeal the decision to the supreme court, as the appeal process might take longer than his sentence.

 

Other Iceland bank executives also convicted

 

The Reykjavik District Court had lopped off nine months of Arnason’s sentence, saying they were suspended.  Other bank executives involved in the situation were convicted: Ivar Gudjonsson, the former director of proprietary trading at the bank, along with Julius Heidarsson, a former broker at the bank. They each received nine-month sentences and six of those nine months were immediately suspended by the court.

 

All pleaded innocent to the charges, as the the fallout from the 2008 crisis continues to this day in the north Atlantic island and around the world.  As a sign of thawing in the crisis, Reuters reported that earlier in the week Landsbanki, the successor to the failed Landsbankinn, agreed to extend a deadline to restructure bonds to the end of the year. If a bond restructuring agreement is reached, it could help the government lift capital controls which were imposed due to the crisis.

*  *  *

It appears he needs to ‘donate’ more to the nation’s leaders.

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Submitted by Michael Snyder of The Economic Collapse blog,

Are you waiting for the next major wave of the global economic collapse to strike?  Well, you might want to start paying attention again.  Three of the ten largest economies on the planet have already fallen into recession, and there are very serious warning signs coming from several other global economic powerhouses.  Things are already so bad that British Prime Minister David Cameron is comparing the current state of affairs to the horrific financial crisis of 2008.  In an article for the Guardian that was published on Monday, he delivered the following sobering warning: “Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.”  For the leader of the nation with the 6th largest economy in the world to make such a statement is more than a little bit concerning.

So why is Cameron freaking out?

Well, just consider what is going on in Japan.  The economy of Japan is the 3rd largest on the entire planet, and it is a total basket case at this point.  Many believe that the Japanese will be on the leading edge of the next great global economic crisis, and that is why it is so alarming that Japan has just dipped into recession again for the fourth time in six years…

Japan’s economy unexpectedly fell into recession in the third quarter, a painful slump that called into question efforts by Prime Minister Shinzo Abe to pull the country out of nearly two decades of deflation.

 

The second consecutive quarterly decline in gross domestic product could upend Japan’s political landscape. Mr. Abe is considering dissolving Parliament and calling fresh elections, people close to him say, and Monday’s economic report is seen as critical to his decision, which is widely expected to come this week.

Of course Japan is far from alone.

Brazil has the 7th largest economy on the globe, and it has already been in recession for quite a few months.

And the problems that the national oil company is currently experiencing certainly are not helping matters…

In the past five days, 23 powerful Brazilians have been arrested, with even more warrants still outstanding.

 

The country’s stock market has become a whipsaw, and its currency, the real, has hit a nine-year low.

 

All of this is due to a far-reaching corruption scandal at one massive company, Petrobras.

 

In the last month the company’s stock has fallen by 35%.

The 9th largest economy in the world, Italy, has also fallen into recession…

Italian GDP dropped another 0.1% in the third quarter, as expected.

 

That’s following a 0.2% drop in Q2 and another 0.1% decline in Q1, capping nine months of recession for Europe’s third-largest economy.

Like Japan, there is no easy way out for Italy.  A rapidly aging population coupled with a debt to GDP ratio of more than 132 percent is a toxic combination.  Italy needs to find a way to be productive once again, and that does not happen overnight.

Meanwhile, much of the rest of Europe is currently mired in depression-like conditions.  The official unemployment numbers in some of the larger nations on the continent are absolutely eye-popping.  The following list of unemployment figures comes from one of my previous articles…

• France: 10.2%
• Poland: 11.5%
• Italy: 12.6%
• Portugal: 13.1%
• Spain: 23.6%
• Greece: 26.4%

Are you starting to get the picture?

The world is facing some real economic problems.

Another traditionally strong economic power that is suddenly dealing with adversity is Israel.

In fact, the economy of Israel is shrinking for the first time since 2009…

Israel’s economy contracted for the first time in more than five years in the third quarter, as growth was hit by the effects of a war with Islamist militants in Gaza.

 

Gross domestic product fell 0.4 percent in the July-September period, the Central Bureau of Statistics said on Sunday. It was the first quarterly decline since a 0.2 percent drop in the first three months of 2009, at the outset of the global financial crisis.

And needless to say, U.S. economic sanctions have hit Russia pretty hard.

The rouble has been plummeting like a rock, and the Russian government is preparing for a “catastrophic” decline in oil prices…

President Vladimir Putin said Russia’s economy, battered by sanctions and a collapsing currency, faces a potential “catastrophic” slump in oil prices.

 

Such a scenario is “entirely possible, and we admit it,” Putin told the state-run Tass news service before attending this weekend’s Group of 20 summit in Brisbane, Australia, according to a transcript e-mailed by the Kremlin today. Russia’s reserves, at more than $400 billion, would allow the country to weather such a turn of events, he said.

 

Crude prices have fallen by almost a third this year, undercutting the economy in Russia, the world’s largest energy exporter.

It is being reported that Russian President Vladimir Putin has been hoarding gold in anticipation of a full-blown global economic war.

I think that will end up being a very wise decision on his part.

Despite all of this global chaos, things are still pretty stable in the United States for the moment.  The stock market keeps setting new all-time highs and much of the country is preparing for an orgy of Christmas shopping.

Unfortunately, the number of children that won’t even have a roof to sleep under this holiday season just continues to grow.

A stunning report that was just released by the National Center on Family Homelessness says that the number of homeless children in America has soared to an astounding 2.5 million.

That means that approximately one out of every 30 children in the United States is homeless.

Let that number sink in for a moment as you read more about this new report from the Washington Post…

The number of homeless children in the United States has surged in recent years to an all-time high, amounting to one child in every 30, according to a comprehensive state-by-state report that blames the nation’s high poverty rate, the lack of affordable housing and the effects of pervasive domestic violence.

 

Titled “America’s Youngest Outcasts,” the report being issued Monday by the National Center on Family Homelessness calculates that nearly 2.5 million American children were homeless at some point in 2013. The number is based on the Education Department’s latest count of 1.3 million homeless children in public schools, supplemented by estimates of homeless preschool children not counted by the agency.

 

The problem is particularly severe in California, which has about one-eighth of the U.S. population but accounts for more than one-fifth of the homeless children, totaling nearly 527,000.

This is why I get so fired up about the destruction of the middle class.  A healthy economy would mean more wealth for most people.  But instead, most Americans just continue to see a decline in the standard of living.

And remember, the next major wave of the economic collapse has not even hit us yet.  When it does, the suffering of the poor and the middle class is going to get much worse.

Unfortunately, there are already signs that the U.S. economy is starting to slow down too.  In fact, the latest manufacturing numbers were not good at all…

The Federal Reserve’s new industrial production data for October show that, on a monthly basis, real U.S. manufacturing output has fallen on net since July, marking its worst three-month production stretch since March-June, 2011. Largely responsible is the automotive sector’s sudden transformation from a manufacturing growth leader into a serious growth laggard, with combined real vehicles and parts production enduring its worst three-month stretch since late 2008 to early 2009.

A lot of very smart people are forecasting economic disaster for next year.

Hopefully they are all wrong, but I have a feeling that they are going to be right.

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