Tag: news

ISIS Gains Big Ground, U.S. Strategy Shifts, Former Obama CIA Chief Predicts 30-Year War

As the Obama
administration hashes out its plans for war against the Islamic
State (ISIS), it’s becoming clear that the depth and duration of
America’s involvement will be much larger than anticipated. The
president estimated that it could take three years to win the war.
His former CIA director says it will be ten times as long.

“I think we’re looking at kind of a 30-year war,” Leon Panetta

predicted yesterday. As head of the CIA, he oversaw the
operation to kill Osama bin Laden. Panetta also served two years as
Secretary of Defense for President Barack Obama.

According to USA Today, Panetta anticipates that
America’s latest iteration of the war on terror “will have to
extend beyond Islamic State to include emerging threats in Nigeria,
Somalia, Yemen, Libya and elsewhere.” The former CIA chief is
promoting a memoir that takes a somewhat critical look at Obama’s
leadership, and the book is already under fire from the State
Department and Vice President Joe Biden.

Meanwhile, ISIS is gaining major ground on its Syrian front. The
terrorist organization, operating tanks and heavy artillery, has
apparently already raised its flags over a town called Kobani. CNN
reports:

The fall of the city would carry huge symbolic and strategic
weight, giving ISIS sway over an uninterrupted swatch of land
between the Turkish border and its self-declared capital in Raqqa,
Syria, 62 miles away. …

ISIS managed to close in on Kobani despite airstrikes by the
United States and allied forces over the weekend and on Monday.

In related news, the U.S. announced that Apache helicopters are
now part of the fight against the Islamic State. Stars and
Stripes
explains the significance:

Until Sunday, U.S. airstrikes in Iraq have been limited to
fast-moving Air Force and Navy fighter aircraft and drones. But the
use of the relatively slow-flying helicopters represents an
escalation of American military involvement and is a sign that the
security situation in Iraq’s Anbar province is deteriorating.
…

“It’s definitely boots in the air. This is combat, assuming U.S.
Army guys were flying the helicopters,” said White, a defense
fellow at the Washington Institute for Near East Policy, a
center-right policy institute. “Using helicopter gunships in combat
operations means those forces are in combat.”

Moreover, the Obama administration’s decision to authorize the
use of U.S. helicopter gunships indicates that nearly two months of
U.S.-led airstrikes by fixed-wing fighters and bombers have failed
to stop the Islamic State from massing ground troops and launching
offensive operations, he said.

Read more Reason coverage of ISIS here. 

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Is This The Usual Reason Why Stocks Are Plunging?

Excerpted from today’s World-Renowned Gartman Letter,

SHARE PRICES HAVE FLOWN SKYWARD as our International Index has gained triple digits… precisely 100 points… for one of the very few times in its history, or 1.1% and it would have been higher still had it not been for holidays in Germany and China which have left their DAX and the Shanghai indices unchanged from the levels prevailing Friday. As evidenced by the chart of the S&P at the upper left of p.1, the support we had hoped would hold late last week had indeed held; the well-defined upward sloping trend channel continues to remain fully intact and until that trend line is broken we have to once again err upon the side of being bullish of shares generally. It is that simple and to make it more complex than that shall make it difficult to keep one’s focus.

 

Oh, there are indeed any and all sorts of fundamental reasons why the stock market in general terms is given over to being over-extended to the upside, including P/e ratios that are high; including earnings that may prove faulty; including high levels of margin debt; including far, far too many IPO’s that we think are ill-advised and overpriced; including the end of QE here in the US and of course including the horrible geo-political storms brewing seemingly ceaselessly… but yet support levels have held and trends from the lower left to the upper right obtain. One may wish to join the bearish camp, but one would be wrong.

 

…Prices are headed higher and we’ve no choice but to reduce our exposure on the short side via derivatives that shall therefore increase our long exposure.

And then this happened…




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Unleashed Algos Go Batshit In Bankrupt GTAT

GT Advanced technologies has been halted numerous times since re-opening post-bankruptcy

 

This is how price discovery occurs in a massively overvalued company, with no cash flows, and a record short interest…




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What Bubble? Record $924 Billion In 65 Million Auto Loans: 31% Of All New Loans Are Subprime

And now for something funny.

Earlier today, credit agency Equifax piggybacked on Experian’s auto loan data, and reported the following:

  • The total balance of auto loans outstanding in August is $924.2 billion, an all-time high and an increase of 10.8% from same time a year ago
  • The total number of auto loans outstanding stands at more than 65 million, a record high and an increase of more than 6% from the same time last year;
  • The total number of new loans originated through June is 12.5 million, an increase of 4.9% from same time a year ago
  • The total balance of new loans is $254.2 billion, an increase of 6.9% from same time a year ago and representing nearly half of total new non-mortgage credit originated
  • The total number of new loans originated year-to-date through June for subprime borrowers, defined as consumers with Equifax Risk Scores of 640 or lower, is 3.9 million, representing 31.2% of all auto loans originated this year.
  • Similarly, the total balance of newly originated subprime auto loans is $70.7 billion, an eight-year high and representing 27.8% of the total balance of new auto loans
  • Year-to-date in June, the average loan amount for borrowers with risk scores of 680 or lower are increasing the most, showing a 3% increase from the previous year. Loan sizes among borrowers with risk scores of 760 or higher show little change from the same time a year ago

At least we now know, definitively, what the reason for the US manufacturing surge in the late spring early summer was: a subprime credit-driven car buying binge.

But wait, there’s more: because here is Equifax’ “conclusion” based on the above bullets:

“Auto sales continue to soar, crossing the 17.4 million mark on an annualized basis for new cars and light trucks in August,” said Amy Crews Cutts, Senior Vice President and Chief Economist at Equifax. “The abundance of high-quality vehicles for sale, the attractive financing options available, and the ever-increasing age of cars on the road today have created an environment that makes it easy for consumers to say ‘yes’ when it comes to purchasing a new or used car. Importantly, auto loan originations to borrowers with subprime credit scores remain stable, providing additional evidence that a bubble is not occurring in that space.“

To summarize: to Equifax a record car loan bubble with an 8 year high in subprime origination is “evidence” that there is no bubble.

And… #Ref!




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A. Barton Hinkle: What the Hannah Graham Disappearance Says About U.S. Culture and the Media

Nobody knows what happened to Hannah
Graham, the University of Virginia sophomore who disappeared on
Sept. 13—though a lot of people probably have their suspicions,
given the arrest of Jesse Leroy Matthew Jr. Naturally, interest in
the case has been intense. Search parties have combed
Charlottesville and Texas, where Matthew was captured, in hopes of
finding Graham. News outlets have covered the story heavily. But as
A. Barton Hinkle observes, if you visit the missing-children page
on the website of the Virginia State Police, you’ll see scores and
scores of notices for kids who have vanished. Some have been
missing only a few days. Others have been missing for months.
Others for years. Where are they? What happened to them?
Unfortunately, Hinkle writes, when attractive young white women
disappear, their disappearances tend to receive far more attention
than the disappearances of people from other demographics.

View this article.

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Watch This Pittsburgh Detective Steal a Man’s Money at 7-Eleven

Another day, another American whose personal dealings with local
police zap him of all faith in “the system”. Pittsburgh resident
Robert Simpson was “the kind of guy who believes in the system”

until a recent run-in with a greedy detective and a
department uninterested in punishing him. 

Last summer, Simpson accidently left an envelope containing $220
on a 7-Eleven counter after setting it there while he paid,
according to CBS Pittsburgh. 

When he returned, it was gone. He was sure he left it on the
counter and talked to a clerk. “She told me at that point that if
that’s the case, I can tell you exactly who took it because the
cameras will show you,” he said. The surveillance video was
reviewed and it showed that a few minutes earlier, city detective
Michael Reddy allegedly took it.

Simpson said Detective Reddy was still in the 7-Eleven when he
came back looking for his money not long later:

“I came back in the store and both occasions he was standing
less than 15 feet from me when I asked for my money. And he never
responded. And he’s standing there with it in his pocket. Anybody
who knows me knows that if I’m talking you can hear me a block
away.” 

Reddy didn’t tell his partner or anyone else about the money
until he was questioned about it by superiors later, after Simpson
got in touch with the department. But Reddy testified at a hearing
this week that he certainly intended all along to turn the money
over, and District Judge James Hanley dropped the theft charges
that had been brought against him. 

Simpson told CBS he’s shocked by the decision. “Here they’re
showing me that the system doesn’t work, at least it doesn’t work
in Allegheny County,” he said. But, but … this detective
certainly looks like he made all good-faith efforts to find out who
the money belongs to, no? 

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VID: Flint Mayor Dayne Walling Says People, Not Government Will Drive Urban Renewal

“Flint Mayor Says People, Not Government Will Drive Urban
Renewal” is the latest video from Reason TV. Watch above or click
on the link below for video, full text, supporting links,
downloadable versions, and more Reason TV clips.

View this article.

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Cramer Does It Again: GTAT -93% Since Aug 26th Recommendation

Presented with no comment…

August 26th pre-market: “Talk about growth… hey have the sapphire product that is going to go in the iPhone 6 launch… this is the stock I have been recommending!“ – $18.88

 

October 4th: Chapter 11 – $0.97

 

*  *  *

Trade Accordingly




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Gold Support At $1,180/oz and $1,161/oz, Then At $1,000/oz

Gold had a torrid September and suffered further losses last week of 2.2%.


Gold in U.S. Dollars,  5 Years (Thomson Reuters)

The move lower in September was technically driven as there was no negative headline data, obvious reasons for price falls or indeed evidence of physical gold selling. Most of the selling was on the COMEX and gold remained firm in Asian trading throughout the month.

Indeed, the mood music for gold is quite positive – especially the appalling western relations with Russia, Middle Eastern tensions and attendant geopolitical risk.

One plausible factor for gold’s weakness is the ever increasing, “irrationally exuberant” appetite for the dollar globally which may be impacting gold. 

Despite, poor economic data out of the U.S. in recent days, the dollar has continued to eke out gains.

Poor data has not led to the bounce in gold that one would have expected. The permanently levitating stock markets have seen weakness and this may be a prelude to much larger losses.  

There is increasing evidence that the U.S. consumer is struggling and close to being tapped out. Indeed, housing data has been poor recently which suggests the recent housing boom could be on its last legs. The latter scenario is likely the case which will prove bullish for gold in the long term.

Technically, gold is vulnerable to a further fall to test its bottom from July, 2010, at $1,161/oz. This is particularly the case in the very short term, in other words, this week. A breach of the $1,161/oz level could result in a rapid fall to test $1,110/oz and the long term support at $1,000/oz.


Silver in U.S. Dollars,  5 Years (Thomson Reuters)

Silver is also vulnerable after breaking below key resistance. Technical support is at $15/oz.

Therefore, short term weakness is a real risk and those considering reducing allocations should sell in the short term. At the same time, it is important to remember that with market manipulations of today, technical analysis is not as useful a tool as heretofore. 

The long term fundamentals remain very sound and those who are patient and focus on gold’s strong fundamentals and still robust global demand, especially from China and India, will be rewarded again. 

MARKET UPDATE
Today’s AM fix was USD 1,193.25, EUR 951.56 and GBP 746.67 per ounce.    
Friday’s AM fix was USD 1,207.50, EUR 956.06 and GBP 751.03 per ounce.

Gold fell $22.00 or 1.81% to $1,191.80 per ounce and silver slid $0.29 or 1.7% to $16.81 per ounce Friday. Gold and silver both finished down for the week at 2.11% and 4.65% respectively.

Gold on the New York Globex was pushed to to its lowest level in almost 15 months at the open on Sunday night prior to gold in Hong Kong moving higher from $1,187/oz an ounce to $1,195/oz. 
Singapore gold bullion markets, a key bullion trading centre in Southeast Asia, were also closed for a public holiday.

Precious metals are at multi-year lows. Platinum hit its lowest price since 2009, silver fell to its weakest since 2010, and palladium touched an 8-month low.

Gold premiums in Hong Kong were $1.20 to $1.60 an ounce to the spot London prices, in line with last week, even though there was a sharp drop in cash gold prices.

With Chinese markets closed for national holidays until Wednesday, an increase in demand should come about on the return of the world’s largest gold bullion buyer. 




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