finance – Page 19006

Stocks Stuck Ahead Of Postponed Payrolls

Overnight global markets have gone decidedly nowhere, in expectation of the long-overdue September payroll report, and seemingly oblivious of the Goldman pre-announcement all clear that “Any positive number will be discounted because it came before the DC theatrics and if it’s weak it confirms that tapering should be put off longer.” In other words, both the September, and accompanying July and August revisions (recall it was the revisions where the August NFP number ended the FOMC’s taper talk) are meaningless because everything will be spun bullish. For those who do care – mostly headline reacting HFT algos – here is the summary: consensus is for 180k (unemployment rate unchanged at 7.3%). Note that the survey period for today’s payrolls report was prior to the shutdown which started on October 1st. As for how the amusingly named “market” will react to the news: see Goldman quote above, or better yet: just call the NYFed trading desk.

On today’s docket there isn’t much else on the calendar aside from the US payroll report which is due at 8:30 am Eastern. It’s a busy day for corporate earnings as 30 S&P500 constituents report today with names like Lockheed Martin (before market). The Richmond Fed manufacturing survey and construction spending are the other data releases of note.

Overnight bulletin summary from BBG and Ran

The September nonfarm payrolls report will be released today, eleven days later than originally scheduled, after a bipartisan agreement was reached to reopen the US government.
Estimates range from 100k to 256k; A payrolls number of 175k or less, supported by “flabby” earnings/hours worked and August revised lower by 25k or more, would drive the biggest rally in Treasuries, FTN strategist Jim Vogel wrote in a note yesterday
According to policy adviser, China’s central bank may tighten policy slightly in response to rising inflation.
Barclays cut Japan Q3 GDP forecast to an annual +0.3% from +2.2% citing sluggish Japan consumption and exports.
Britain’s budget deficit narrowed more than economists forecast in September as the housing-market recovery boosted stamp duty and rising spending lifted value-added tax
Home prices in China’s four major cities jumped the most since January 2011, heightening concerns a bubble is forming as the government refrains from introducing more property curbs that would hinder economic growth
Bank of America Corp., sued by U.S. attorneys in August over an $850m mortgage bond, faces three additional Justice Department civil probes over MBS, according to two people with direct knowledge of the situation
The frantic weeks before the start of Obamacare were marked by a chaotic effort in which officials failed to complete exhaustive testing of the program’s website in a push to begin signups by Oct. 1, according to people involved in the rollout
Obama sought to reassure French President Francois Hollande about the countries’ relations after a report that the NSA eavesdropped on millions of phone calls inside France
Sovereign yields mostly lower, EU peripheral spreads narrow. Asian equities mixed, Nikkei gains 0.1%; European markets and U.S. equity-index futures little changed. WTI crude and gold lower, copper gains

Market Re-Cap from RanSquawk

Even though stocks traded lower in Europe this morning ahead of the release of the delayed jobs report by the BLS, both EUR/CHF and USD/JPY remained bid, underpinning the view that the release is unlikely to have a meaningful impact on the market direction when released later on in the session. A similar view was also echoed by analysts at GS, who believe that any positive number will be discounted because it came before the DC theatrics and if it’s weak it confirms that tapering should be put off longer. The cautious sentiment, together with decent earnings from Novartis meant that the more defensive equity sectors outperformed, which also resulted in the SMI outperforming its EU peers. Going forward, apart from awaiting the release of the jobs report, market participants will also get to digest more corporate updates, with around 30 S&P 500 constituents reporting today.

Asian Headlines

Barclays cut Japan Q3 GDP forecast to an annual +0.3% from +2.2% citing sluggish Japan consumption and exports.

Barclays also forecast Japan’s growth to rise at an annual 3.7% in Q4.

According to policy adviser, China’s central bank may tighten policy slightly in response to rising inflation.

Also added that China’s central bank will rely on money market liquidity adjustments to tighten policy and China’s economy likely to grow 7.5% in Q4, 7.6% in 2013, China’s annual inflation may be 3.1% in Q4, no sharp rises expected.

EU & UK Headlines

BoE’s Bean said that the fact that UK yield curve has steepened far less recently than past recoveries would suggest, may indicate that forward guidance has some effect on short end.

Separately, BoE’s Tucker said that forward guidance means BoE wont commit to stimulus exit prematurely when there is still slack in economy

UK PSNB ex interventions (Sep) M/M 11.1ln vs. Exp. 11.3bln (Prev. 13.2bln, Rev. 12.5bln)
– UK Public Finances (PSNCR) (Sep) M/M -0.6bln vs. Exp. 8.2bln (Prev. -3.0bln, Rev. -2.7bln)
– UK Public Sector Net Borrwing (Sep) M/M 9.4bln vs. Exp. 10.0bln (Prev. 11.5bln, Rev. 10.8bln)
– UK PSNB ex Royal Mail, APF (Sep) M/M 11.1bln vs. Exp. 11.5bln (Prev. 13.2bln, Rev. 12.5bln)

Bunds traded steady this morning, as market participants remained on the sidelines ahead of the release of the jobs report from the BLS. There was also distinct lack of supply, with only Spanish Treasury selling just over EUR 3.5bln in 3- and 9-Month T-Bills, while the 7y EFSF issue was set at EUR 6bln and MS+20bps area.

Separately, the DMO from the UK set the size of the upcoming 2068 Gilt tap at GBP 4.5bln and final spread at +2.5bps over 2060 Gilt.

ECB’s Coene says further drop in inflation might warrant policy action, but too early now.

German government to keep their growth forecast for 2013 at 0.5%, raise forecast for 2014 to 1.7% from 1.6%, according to a source.

US Headlines

Apart from digesting the release of the delayed jobs report, market participants will also await the release of the latest Richmond Fed manufacturing survey and construction spending data.

Equities

Stocks traded steady in Europe, albeit in minor negative territory, and health care sector outperforming as market participants awaited the release of the delayed NFP report. SMI outperformed, with Novartis leading the move higher following an encouraging earnings report pre-market. Also, despite lower commodity prices, the FTSE-100 index also traded higher, with BHP Billiton among the best performing stocks after the company raised FY14 iron ore guidance to 212mln tonnes and maintained FY14 production guidance for petroleum, copper and coal.

Even though USD/JPY implied vols traded heavy ahead of the major risk event (NFP report from the US), the spot rate remained bid and tested the 100DMA line at 98.41. Move above will see the pair target the 50DMA line which is located just above at 98.47.

Looking elsewhere, despite softer commodity prices, AUD/USD trended higher and traded close to its highest levels since mid-June, after BHP Billiton raised its production forecast for iron ore. Technically, major technical resistance level is seen at the 200DMA line at 0.9753.

Commodities

According to Energy Aspects, Asia have paused imports of crude, following expectations
that Iraqi production is to resume following maintenance shutdowns.

In order for China to win a waiver on US sanctions regarding Tehran’s nuclear programme, the nation will need to make huge cuts to its Iranian oil imports. In other news for China, the countries winter gas supply shortfall may rise to as much as 10%.

BMO revises up 2014 gold forecast from USD 1,181 to USD 1,275 and silver from USD 18 to USD 21.

BHP Billiton raised FY14 iron ore guidance to 212mln tonnes and maintained FY14 production guidance for petroleum, copper and coal.

China platinum jewellery demand is seen reaching a record this year, with demand climbing to 2.1mln oz, according to ETF Securities Director of Research Mike McGlone.

* * *

Deutsche completes the overnight event narrative and summarizes what to expect today:

As regular readers will know we have long thought that tapering is going to be incredibly slow paced and probably now not starting until March 2014 at the earliest (fast becoming consensus). As such we continue to believe most assets will stay at elevated valuations and probably get more expensive over the coming few months on liquidity reasons alone. However even if we end up being correct there can always be much volatility around the market’s perception of the timing of the taper and short-term reversals are easily possible. Days like today could swing markets back to pricing earlier tapering if the number is decent. Our base case is for a sluggish sub-200k pace of payroll gains over the next few months but one thing that keeps us vigilant on thisview is that seasonals often turn more positive from this point in the calendar. The three summer months tend to have depressed payroll numbers and its possible the soggy numbers seen this summer were just another manifestation of this. There’s almost no way of proving this but it’s possible that history repeats itself and that payrolls end the year more buoyant than we expect. So notwithstanding the likely distortions coming up in future reports from the shutdown, today’s number will provide some clues as to whether there has been any seasonal bias in 2013. The ADP report for September we saw nearly 3 weeks ago argues against this though as it came in at a tepid +166k. So we’re not basing our view on the seasonals but will feel more comfortable with our very slow tapering view through 2014 once we see a continuation of the slow job growth post the summer.

Indeed yesterday the Fed’s Charles Evans, one of the more dovish members of the FOMC, commented to the effect that the Fed will likely delay tapering for at least a few months. Evans mentioned that the hurdles for tapering included “a couple of good labor reports and evidence of increasing GDP growth” which is “probably going to take a few months to sort out”. Evans also pretty much ruled out a move at this month’s FOMC which clearly isn’t a surprise.

Yesterday’s US home sales data also argued against an imminent taper. Existing home sales declined 1.9% to an annual seasonally adjusted rates of 5.29M. The prior month’s print of 5.48M was revised lower to 5.39M as well. The National Association of Realtors mentioned that housing affordability has fallen to a five year low as a result of rising rates and house prices.

Risk appetite is very much in consolidation mode in overnight markets following on from yesterday where the S&P500 (+0.01%) managed to eke out the smallest of gains. Volumes are low across the board with most investors content to stay on the sidelines ahead of today’s NFP. The Hang Seng (-0.48%) and Chinese A-shares (-0.6%) are the overnight laggards in Asia after the latest Chinese home price data showed that prices increased in 69 out 70 major cities. There were 20%+ yoy price increases in a number of cities while prices rose 16% and 17% in Beijing and Shanghai respectively. The data is adding further policy risk to the Chinese real estate and construction sector. On the micro-side there has been some talk that Apple Inc is preparing a 55-inch and 65-inch ztelevision for sale from Q3 2014 (Source: Bloomberg). This comes ahead of the company’s product event today which some are expecting will be used to unveil a suite of updates and new products. Apple’s stock was up 2.5% yesterday and a number of digital display companies in Asia are outperforming overnight. Other equity indices such as the Nikkei (+0.05%) and ASX200 (+0.4%) are marginally firmer, the latter by mining giant BHP who raised their full year iron ore production target. On the fixed income side, 10yr UST yields are unchanged at 2.60% and Asian credit spreads are 1-2bp wider amid some position squaring ahead of the event risks later today.

Looking ahead to today, there isn’t much else on the data calendar aside from the US payroll report which is due at 1:30pm London time. It’s a busy day for corporate earnings as 30 S&P500 constituents report today with names like Lockheed Martin (before market) interesting from a macro perspective. The Richmond Fed manufacturing survey and construction spending are the other data releases of note.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/b-PmNT9oPa4/story01.htm Tyler Durden

China New Home Prices Rise in 69 Of 70 Cities

China’s attempts to curb runaway inflation in its housing market – which in a country in which the relatively young capital markets lack the breadth and depth of their western equivalents remains the only venue in which to park any of the excess cash generated from the global central bank liquidity avalanche – continue to be met with failure after failure. Overnight, the China Statistics Bureau reported that in September new home price across the country’s 70 tracked cities, rose in virtually all of them, or 69 compared to a year ago. On a monthly basis, or compared to August, new home prices rose in only 65 of China’s cities, compared to 66 in the month prior. And while the CSB data differs from the Shanghai Uwin data reported yesterday, the government’s data while less stunning still shows the extent of the Chinese housing bubble and the persistent inflation plaguing the country: Beijing new home prices rose 1% M/m; and 16% Y/y; Shanghai new home prices rose 1.4% M/m; and 17% Y/y in September.

Peter Schiff Asks "Is This The Green Light For Gold?"

Submitted by Peter Schiff via Euro Pacific Capital,

It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.

The common wisdom on Wall Street is that gold has seen the moment of its greatness flicker. This confidence has been fueled by three beliefs: A) the Fed will soon begin trimming its monthly purchases of Treasury and Mortgage Backed Securities (commonly called the "taper"), B) the growing strength of the U.S. economy is creating investment opportunities that will cause people to dump defensive assets like gold, and C) the renewed confidence in the U.S. economy will shore up the dollar and severely diminish gold's allure as a safe haven. All three of these assumptions are false. (Our new edition of the Global Investor Newsletter explores how the attraction never dimmed in India).

Recent developments suggest the opposite, that:

A) the Fed has no exit strategy and is more likely to expand its QE program than diminish it,

B) the U. S. economy is stuck in below-trend growth and possibly headed for another recession

C) America's refusal to deal with its fiscal problems will undermine international faith in the dollar.

Parallel confusion can be found in Wall Street's reaction to the debt ceiling drama (for more on this see my prior commentary on the Debt Ceiling Delusions). Many had concluded that the danger was that Congress would fail to raise the ceiling. But the real peril was that it would be raised without any mitigating effort to get in front of our debt problems. Of course, that is just what happened.

These errors can be seen most clearly in the gold market. Last week, Goldman Sachs, the 800-pound gorilla of Wall Street, issued a research report that many read as gold's obituary.The report declared that any kind of agreement in Washington that would forestall an immediate debt default, and defuse the crisis, would be a "slam dunk sell" for gold. Given that most people never believed Congress would really force the issue, the Goldman final note to its report initiated a panic selling in gold. Of course, just as I stated on numerous radio and television appearances in the day or so following the Goldman report, the "smartest guys in the room" turned out to be wrong. As soon as Congress agreed to kick the can, gold futures climbed $40 in one day.

Experts also warned that the dollar would decline if the debt ceiling was not raised. But when it was raised (actually it was suspended completely until February 2014) the dollar immediately sold off to a 8 ½ month low against the euro. Ironically many feared that failing to raise the debt ceiling would threaten the dollar's role as the world's reserve currency. In reality, it's the continued lifting of that ceiling that is undermining its credibility.

The markets were similarly wrong-footed last month when the "The Taper That Wasn't" caught everyone by surprise. The shock stemmed from Wall Street's belief in the Fed's false bravado and the conclusions of mainstream economists that the economy was improving. I countered by saying that the signs of improvement (most notably rising stock and real estate prices) were simply the direct results of the QE itself and that a removal of the QE would stop the "recovery" dead in its tracks. Despite the Fed surprise, most people still believe that it is itching to pull the taper trigger and that it will do so at its earliest opportunity (although many now concede that it may have to wait until this political mess is resolved). In contrast, I believe we are now stuck in a trap of infinite QE (which is the theme of my Newsletter issued last week).

The reality is that Washington has now committed itself to a policy of permanent debt increase and QE infinity that can only possibly end in one way: a currency crisis. While the dollar's status as reserve currency, and America's position as both the world's largest economy and its largest debtor, will create a difficult and unpredictable path towards that destination, the ultimate arrival can't be doubted. The fact that few investors are drawing these conclusions has allowed gold, and precious metal mining stocks, to remain close to multi year lows, even while these recent developments should be signaling otherwise. This creates an opportunity.

Gold moved from $300 to $1,800 not because investors believed the government would hold the line on debt, but because they believed that the U.S. fiscal position would get progressively worse. That is what happened this week. By deciding to once again kick the can down the road, Washington did not avoid a debt crisis. They simply delayed it. That is why I tried to inform investors that gold should rally if the debt limit were raised.Instead most investors put their faith in Goldman Sachs.

Investors should be concluding that America will never deal with its fiscal problems on its own terms. In fact, since we have now redefined the problem as the debt ceiling, rather than the debt itself, all efforts to solve the real problem may be cast aside. It now falls on our nation's creditors to provide the badly needed financial discipline that our own elected leaders lack the courage to face. That discipline will take the form of a dollar crisis, which will morph into a sovereign debt crisis. This would send U.S. consumer prices soaring, push the economy deeper into recession, and exert massive upward pressure on U.S. interest rates. At that point the Fed will have a very difficult decision to make: vastly expand QE to buy up all the bonds that the world is trying to unload (which could crash the dollar), or to allow bonds to fall and interest rates to soar (thereby crashing the economy instead).

The hard choices that our leaders have just avoided will have to be made someday under far more burdensome circumstances. It will have to choose which promises to keep and which to break. Much of the government will be shut down, this time for real. If the Fed does the wrong thing and expands QE to keep rates low, the ensuing dollar collapse will be even more damaging to our economy and our creditors. Sure, none of the promises will be technically broken, but they will be rendered meaningless, as the bills will be paid with nearly worthless money.

In fact, the Chinese may finally be getting the message. Late last week, as the debt ceiling farce gathered steam in Washington, China's state-run news agency issued perhaps its most dire warning to date on the subject: "it is perhaps a good time for the befuddled world to start considering building a de-Americanized world." Sometimes maps can be very easy to read. If the dollar is doomed, gold should rise.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ln4gmIEcVME/story01.htm Tyler Durden

Peter Schiff Asks “Is This The Green Light For Gold?”

Submitted by Peter Schiff via Euro Pacific Capital,

Recent developments suggest the opposite, that:

A) the Fed has no exit strategy and is more likely to expand its QE program than diminish it,

B) the U. S. economy is stuck in below-trend growth and possibly headed for another recession

C) America's refusal to deal with its fiscal problems will undermine international faith in the dollar.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ln4gmIEcVME/story01.htm Tyler Durden

China Is Now The World’s Largest Importer Of Oil – What Next?

Submitted by Rory Johnson via OilPrice.com,

Last month the world witnessed a paradigm shift: China surpassed the United States as the world’s largest consumer of foreign oil, importing 6.3 million barrels per day compared to the United States’ 6.24 million. This trend is likely to continue and this gap is likely to grow, according to the EIA’s October short-term energy outlook. Wood Mackenzie, a leading global energy consultancy, echoed this prediction, estimating Chinese oil imports will rise to 9.2 million barrels per day (70% of total demand) by 2020.

World Liquid Fuels Consumption

This trend has been driven by a combination of factors. Booming American oil production, slow post-recovery growth, and increasing vehicle efficiency have all served to reduce crude imports. In China, however, continued economic growth has brought with it a growing middle class eager to take to the road. While the automobile market had cooled earlier this year, September saw sales rise by 21%—a trend that is putting increasing strain on China’s infrastructure and air quality in addition to oil demand.

Some of the world’s largest traffic jams are now commonplace in major Chinese cities, and air quality issues have pushed authorities to pursue synthetic natural gas technology to offset the need for coal-fired electricity. Increasing oil consumption will only serve to exacerbate these issues.

Furthermore, the per capita consumption differential between the two countries is still vast, with an average Chinese citizen consuming a mere 2.9 barrels of oil per year compared to an average American who consumes 21.5. This indicates that China’s growing thirst for oil isn’t going to slow down anytime soon.

So what does this shift in oil imports mean?

More than anything else, it is a sign that China will increasingly depend on global markets to satisfy its ever-growing oil demand. This necessitates further engagement with the international system to protect its interests, encouraging a fuller integration with the current liberal order. This will have effects on both China’s approach to its currency and its diplomatic demeanour.

Derek Scissors wrote last week that this shift might usher in a world where oil is priced in RMB as opposed to solely in USD. This transition could only occur, however, if the RMB was made fully convertible and Beijing steps back from its current policy of exchange rate manipulation. Earlier this year, HSBC predicted that the RMB would be fully convertible by 2017, a reality that is surely hastened by its position as the single largest purchaser of foreign oil. A fully convertible RMB would be a “key step in pushing it as a reserve currency and enhancing its use in global trade, said Sacha Tihanyi, a strategist at Scotia Capital.

On the diplomatic side, while the United States is unlikely to withdraw from its role as defender of global oil production or guarantor of shipping routes, an increasing reliance on foreign oil will push Beijing toward a more engaged role within the international community. It is likely that we will see a change in Beijing’s approach to international intervention and future participation in multilateral counterterrorism initiatives—anything to ensure global stability. In the future, anything that destabilizes the oil market will increasingly harm China more than the United States. While Beijing views this increased import reliance as a strategic weakness, it a boon for those hoping to see Beijing grow into its role as a global leader.

Bottom line: as Chinese oil imports grow, Beijing will become increasingly reliant on the current market-oriented global system—this is nothing but good news for those that enjoy the status quo.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Maf0CLqIXuw/story01.htm Tyler Durden

Fact Or Fiction: New, Improved Obamacare Program Released On 35 Floppy Disks

Responding to widespread criticism regarding its health care website, the federal government today unveiled its new, improved Obamacare program, which allows Americans to purchase health insurance after installing a software bundle contained on 35 floppy disks.

“I have heard the complaints about the existing website, and I can assure you that with this revised system, finding the right health care option for you and your family is as easy as loading 35 floppy disks sequentially into your disk drive and following the onscreen prompts,” President Obama told reporters this morning, explaining that the nearly three dozen 3.5-inch diskettes contain all the data needed for individuals to enroll in the Health Insurance Marketplace, while noting that the updated Obamacare software is mouse-compatible and requires a 386 Pentium processor with at least 8 MB of system RAM to function properly.

“Just fire up MS-DOS, enter ‘A:>dir *.exe’ into the command line, and then follow the instructions to install the Obamacare batch files—it should only take four or five hours at the most. You can press F1 for help if you run into any problems. And be sure your monitor’s screen resolution is at 320 x 200 or it might not display properly.”

Obama added that the federal government hopes to have a six–CD-ROM version of the program available by 2016.

Source: The Onion

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7JuDGSW7BLQ/story01.htm Tyler Durden

12 Shocking Clues For What America Will Look Like When The Next Great Economic Crisis Strikes

Submitted by Michael Snyder via The Economic Collapse blog,

The collapse of American society is accelerating. For the moment, much of our social decay is being masked by the tremendous level of affluence that we are experiencing in aggregate. It has been reported that 4 out of every 5 adults in the United States "struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives", but in general Americans still enjoy a debt-fueled standard of living that is far beyond what most of the rest of the world enjoys. When that debt-fueled standard of living permanently disappears, it is going to unleash chaos unlike anything that America has ever seen before.

Right now, economic conditions in this country are not anywhere close to where they were before 2008, but this is just the beginning. We are in the midst of an ongoing economic collapse which is going to get much, much worse in the years ahead. When the next major wave of the economic crisis strikes, millions of people are going to become extremely desperate. And desperate people do desperate things. We are already starting to see this play out all over the nation, but this is only a preview of coming attractions. What we are going to witness in future years is going to be almost too horrible for words.

So how can I be so sure that this is going to happen? After all, the United States didn't descend into complete and utter chaos during the Great Depression of the 1930s. Wouldn't an economic depression unfold in a similar manner today?

Unfortunately, a lot has changed since then. A lot more Americans were self-sufficient back in those days, and the truth is that the character of our nation has been rotting and decaying for decades. In a previous article, I described it this way…

"We are simply not the same country that we used to be. Americans are proud, selfish, greedy, arrogant, ungrateful, treacherous and completely addicted to entertainment and pleasure. Our country is literally falling apart all around us, but most Americans are so plugged into entertainment that they can't even be bothered to notice what is happening."

Just last weekend, there were "mini-riots" in several U.S. states when "technical issues" caused the food stamp system to go haywire for a few hours.

What would have happened if there had been an extended outage or if the political crisis in D.C. had caused food stamps to be completely cut off at some point in November?

Let's be thankful that we did not have to find out.

But even though major food stamps riots may have been averted (at least for now), there are a whole host of other signs that America is going to become a very unstable place during the next major economic downturn. The following are 12 shocking clues about what America will look like when the next great economic crisis strikes…

#1 Would you continue to work as a bus driver if you were stabbed while driving or if a passenger poured urine all over you? Just check out what has been going on in Detroit lately…

After two drivers were recently stabbed and another had urine poured on her by an angry rider, union officials representing bus drivers for the city of Detroit are set to protest in front of city hall at 10 a.m. on Monday.

#2 We are starting to see a lot of "group crimes" happen all over America. For example, just the other day in Brooklyn, New York a gang of 10 young thugs dragged a young couple out of their vehicle and brutally beat them…

Ronald Russo was dragged to the ground. Then he was punched and kicked in the head. He felt more blows all over his body, investigators said. He suffered a fractured nose, a broken septum, a blood clot and abrasions to his shoulder. He was treated and released from Beth Israel Medical Center.

In the midst of the attack, there was a steady chorus of epithets. “White motherf—–!” screamed the attackers, who ranged in age from 12 to 18.

Alanna Russo, 30, was calling 911 when the 12-year-old girl pulled the woman’s hair and threw her to the ground. The victim’s head slammed into the concrete. She suffered a black eye, bleeding and difficulty breathing, prosecutors said, but she refused medical attention.

#3 A lot of people assume that they are perfectly safe inside their own vehicles but that is not the case at all. A story in the New York Post about a gang of bikers that ruthlessly hunted down a young family that was driving an SUV made national headlines a few weeks ago…

A gang of bikers terrorized a dad driving with his wife and baby daughter on the West Side Highway — chasing after their SUV and then dragging the man out and beating him to a pulp in front of his horrified family, authorities said.

When the bikers caught up with this family they showed the father of the baby daughter absolutely no mercy…

One biker can be seen on the video ripping off his helmet and using it to bash in Lien’s driver’s-side window.

The crew pummeled Lien on the pavement in front of his wife, Rosalyn Ng, and their 2-year-old daughter, police sources said.

Lien, who also was slashed during the melee, was rushed to Columbia University Medical Center. He needed stitches to his face and chest and had two black eyes.

#4 We are living at a time when hearts are becoming very cold. Some Americans are becoming so desperate for money that they will do almost anything to get it. In fact, one couple in Tennessee has actually been charged with selling their four daughters for use in sex films…

An East Tennessee couple is facing a list of charges, accused of selling their children to take part in sex films.

Connie Sue McCall, 40, and her hus
band, Ronnie Lee McCall, 61, of Johnson City have been charged by a federal grand jury.

Paperwork shows the couple was selling their four daughters.

Prosecutors say the four girls were between the ages of 5 and 16 when this happened.

Could you imagine such a thing happening in your neighborhood?

Perhaps it is happening, but you just don't know that it is going on.

#5 And it is not only older people that are having their hearts grow cold. It is happening to young people too. Last week, a 17-year-old girl was caught carrying around a dead baby (which she probably gave birth to) in a shopping bag in a Victoria's Secret store right in the heart of Manhattan…

The dead baby found in the teen’s shopping bag at a Victoria’s Secret store in Manhattan was born alive and then asphyxiated, police said Friday, as the macabre discovery turned toward a possible homicide case.

Police believe 17-year-old Tiana Rodriguez gave birth to the baby at a friend’s house and that the infant was later asphyxiated. However, the city medical examiner’s office said an autopsy was inconclusive, and more tests were needed.

Who does something like that?

#6 Sadly, a lot of mothers appear to be losing the natural affection that they should have for their children. Just check out another incident that happened in New York City recently…

So much for no child left behind.

A stroller-toting mom who used her 1-year-old son as cover during a massive candy shoplifting spree at a downtown Duane Reade used the tot's pram as a battering ram when workers confronted her — and then ran away without the baby, the NYPD said.

#7 One of the clearest signs that American society is decaying is the fact that groups of kids are banding together and agreeing to commit absolutely horrible crimes. We have seen this with the "flash mob" robberies that are plaguing many cities, but what is even worse is when groups of kids band together to commit violent acts. In Pennsylvania recently, a group of teens cheered on attackers as they beat up a 15-year-old girl…

Speaking exclusively to CBS 3, a 15-year-old high school student, whose identity we are concealing, described a terrifying attack by a gang of at least nine teenage boys as she was leaving an Interboro High School football game Monday night.

The teenage victim described first being taunted by the attackers, who followed her down a neighborhood street, cursing and spitting at her, before she was repeatedly kicked and punched, suffering at least one blow to her head.

The attackers even tried to throw her in front of a passing vehicle and nobody tried to stop them…

The victim says as at least two of the teenagers pummeled her, the others cheered them on shouting, “Come on, let’s get her!” At one point, the victim says, the gang tried to throw her under the wheels of a passing car, which swerved, narrowly missing her.

What is happening to this country?

#8 We have also been hearing about a lot of "gang rapes" lately as well. The following is an excerpt from a first-hand account from a 14-year-old girl in Missouri that experienced this type of horrible ordeal…

About five shots tall, I drank it. I guess I didn't know how badly it would mess me up. But the boys who gave it to me did.

Then it was like I fell into a dark abyss. No light anywhere. Just dark, dense silence — and cold. That's all I could ever remember from that night. Apparently, I was there for not even an entire hour before they discarded me in the snow.

You can read the rest of her sobering story right here.

Are you starting to understand why I am so convinced that we have a major problem with our young men in America today?

Instead of raising young gentlemen, we are raising wild animals that seem to have very little self-control.

#9 And sometimes the public does not do anything to stop sexual assaults even when they happen on public streets. In a recent incident in Athens, Ohio, not only did the public not stop a sexual assault, many actually took photos of the assault and posted them on social media websites…

Horrific photos of an alleged rape in progress have been shared on social media after crowds at a college homecoming celebration chose to take pictures and videos of the sex act rather than stopping it.

Would such a thing have happened in our country 50 years ago?

Of course not.

We need to come to grips with how far we have fallen.

#10 In America today, young kids can beat a homeless man to death and it barely even makes a blip on the news. I'll bet hardly any of you have heard about what happened recently to a homeless man in New Jersey…

Three teenagers were in custody Saturday morning, on charges of beating a homeless man to his death in Hoboken, N.J.

As CBS 2’s Janelle Burrell reported, Hudson County Acting Prosecutor Gaetano T. Gregory said two 13-year-olds and a 14-year-old were charged in the Sept. 10 death of Ralph Eric Santiago, 46.

What would cause 13-year-olds and 14-year-olds to behave so savagely?

Could it be because we are raising them in a society where basic morality is not taught any longer?

#11 Our young people certainly do not have much respect for the very elderly anymore either. Instead, the elderly are looked at as "weak" and "easy prey". Just check out what recently happened to a 70-year-old man in upstate New York…

A 70-year-old man was seriously injured early Saturday morning after being attacked outside of a 7-Eleven in Syracuse.

Police say James Gifford had just left the store at the intersection of Valley Drive and South Street just after 6:00 a.m. and was attacked by a group of five or six black males, according to Syracuse Police.

Police also said this appears to be an unprovoked incident with an innocent victim.

#12 In this day and age, it is very hard to tell who you can trust. You might meet someone on the street and they might smile and seem very nice, but inside they may be full of all kinds of garbage. For example, just check out what one man in the Boston area planned to do…

A Boston-area man, who was planning to kidnap children, lock them in a basement dungeon, rape and eat them, should be imprisoned for at least 27 years, federal authorities said in court documents filed this week.

Geoffrey Portway pleaded guilty in May to distribution and possession of child pornography and solicitation to commit a crime of violence, according to court documents. He is scheduled to be sentenced on September 17.

“Portway has pled guilty to some of the most vile and heinous crimes known to our society,” federal prosecutors wrote in a sentencing recommendation.

This is how twisted and perverted our society has become.

A lot of Americans believe that if we could just elect "the right politicians" or if we could just change our economic system or if we could just fix one particular issue that everything would be right in America again.

Unfortunately, what we are facing is not so simple. Our problems are not just in Washington D.C. or on Wall Street. The truth is that our biggest problem is what is going on inside of us.

America is rotting and decaying on the inside, and the next great economic crisis is going to reveal just how bad things have gotten.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VxLVnZIPKp4/story01.htm Tyler Durden

Tomorrow's Payroll Print Will Be Great For Stocks No Matter What: Goldman Explains

Remember when data mattered? Well, it doesn’t anymore (and hasn’t since the advent of central planning in 2009). Just to confirm that here is Goldman’s preview of tomorrow’s nearly two month delayed, September Non-far payrolls, which will be great no matter what, meaning the Fed remains in charge well into 2014. To wit:

“Any positive number will be discounted because it came before the DC theatrics and if it’s weak it confirms that tapering should be put off longer.“

Seriously, since absolutely nothing can possibly be bad news any more, can Bernanke just tell us what the closing print on the S&P for every trading day until the end of 2013 is (when it will usher in the new year at right about 1800) and then for 2014, when assuming 1 SPX tick for every $3.5bn in POMO flows, the S&P should close out that year at 2100. It’s not like anyone even pretends there is a discounting mechanism left.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fsQxwuHnY9c/story01.htm Tyler Durden

Tomorrow’s Payroll Print Will Be Great For Stocks No Matter What: Goldman Explains

“Any positive number will be discounted because it came before the DC theatrics and if it’s weak it confirms that tapering should be put off longer.“

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fsQxwuHnY9c/story01.htm Tyler Durden

Even Quality Will Be Sold When Things Get Messy

On that note, I want to point out that some of the best businesses in the world are beginning to approach valuations that are attractive (see Figure 1 below).

In terms of valuing a company, there are two key metrics I like. One is Enterprise Value (EV) divided by Earnings Before Taxes Interest Depreciation and Appreciation (EBITDA) or EV/ EBITDA.

I prefer this metric to the more traditional Price to Earnings (P/E) valuation metric because both Price (Market Cap) and Earnings are not very accurate measurements of a company’s health.

Regarding price, consider the following… a company that has a market cap of $10 billion, earnings $2 billion, has $2 billion in cash and has $9 billion in debt will look cheap with a P/E of 5… even though its debt load could bankrupt it.

Enterprise Value clears this issue up by including a company’s debt and cash on hand in the valuation process: EV is a company’s market cap, plus its debt, minus its cash. As such it is a much closer approximation of a company’s health than market cap.

Regarding earnings, as I noted in previous articles there are dozens and I literally mean dozens of ways to craft earnings to be better than reality.

For that reason I prefer Earnings Before Taxes Interest Depreciation and Appreciation (EBITDA) as a metric for a company’s earning potential.

I realize this term sounds confusing, but EBITDA is essentially the money a company generates before it pays taxes or manipulates the value of the assets on its balance sheet. As such it’s a much cleaner representation of the cash a company generates.

Thus, EV/ EBITDA is a much better valuation metric than P/E. For that reason I’ve priced the businesses in Figure 1 by EV/ EBITDA.

Another term you need to know about is earnings yield. For those of you who are unfamiliar with earnings yield, this is essentially a ratio made by dividing a company’s Earnings Per Share by its Price Per Share.

I like to use this ratio relative to the yield on the ten-year Treasury (which is considered risk free) to asset the benefit of owning a stock. Given the increased risk of owning a stock, the earnings yield should be dramatically higher than the yield on the Ten Year Treasury.

However, the cash a company generates does not necessarily equal the cash it pays its owners. So I also like to consider a businesses’ dividend yield relative to the yield on the Ten Year Treasury as well.

These three metrics (EV/ EBITDA, Earnings Yield, Dividend Yield) can be used to give a decent “back of the envelope” assessment of the value of a stock.

As you can see in Figure 1 above, some of the best businesses in the world are beginning to trade at attractive valuations from an EV/EBITDA and Earnings Yield perspective.

However, the dividend yield is generally less attractive for most of these companies than the yield on the Ten Year Treasury. And given that stocks are far more volatile, I believe there is simply too much risk here relative to the cash reward for owning them at this time.

I bring all of this up, because I want to make you aware that the bargain basement sale I predicted last issue is only just beginning. And while it is tempting to start backing up the truck to invest, we need to consider the old adage that the fact a stock is cheap doesn’t mean it cannot get cheaper.

Between the low dividends and the risk to the global economy I’ve outlined in last issue, these valuations, while attractive, are not nearly as attractive as I’d like.

When you can buy a business like Apple at a dividend yield of 4+% at a time when the 10 Year Treasury is yielding 2.0% or less, THEN it’s time to go shopping based on the potential risk reward.

This time is coming. But it’s not here yet. The macro picture for the world is dangerous. And high quality companies will not be spared the carnage if a market onslaught begins (which is looking increasingly likely).

For a FREE Special Report outlining how to protect your portfolio from the Fed’s policies, swing by: http://phoenixcapitalmarketing.com/special-reports.html

Best

Phoenix Capital Research

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/wjnFNM8l4mw/story01.htm Phoenix Capital Research