Wednesday, February 10, 2016

Keep Your Seatbelt Fastened – Another Round Of Panic In Stocks Is Likely

"On the heels of the Nikkei plunging 8.5 percent in the past two trading sessions, a legend in the business is telling people to keep their seat belts fastened because another round of panic in stocks is likely.
King World News note: The piece below refers to the “Taper Tantrum.” The term “Taper Tantrum” refers to the surge in US treasury yields (global government bond yields as well), in summer of 2013 when then-Fed Chairman Ben Bernanke put a spotlight on the wind down of Fed asset purchases (tapering off QE).
Here is a portion of today’s note from legend Art Cashin:  Of Canaries, Mine Shafts And Other Warning Signals – Brian Reynolds hangs his hat at New Albion Partners and follows the stock market with a bit of a different perspective. For years, Brian has maintained that U.S. pensions are so underfunded and desperate for yield in a ZIRP environment that they change their risks profiles. They hire hedge funds who then lever their money into equities. 
Brian’s thesis has allowed him to make some great market calls in the last couple years. Monday, however, Brian sent a somewhat cautionary note to clients. Here’s what he wrote: 
In this morning’s column we highlighted the surge in our insurance company CDS index up to the 112 basis point area. We wrote “The most worrisome thing we are looking at in the near term is insurance company credit derivatives.” 

This Is How Frightening The Global Collapse Has Now Become

"On the heels of the Nikkei plunging a jaw-dropping 11 percent in just 3 days, and the world banking system entering another round of panic, this is how frightening the global collapse has now become.
But first, a short-term note of caution…
From Investor’s Intelligence: 
 “(The) BULL/BEAR ratio is (now) at multi-year lows and lower than September/October, 2015 (see remarkable 10-year chart below).
KWN I 2:10:2016


Sunday, February 7, 2016

RED ALERT: The Public Now Has One Of The Largest Short Positions In History!

"The following commentary is from Jason Goepfert at SentimenTrader:  According to the latest data from the Commodity Futures Trading Commission, small speculators are now back to net short, valued at about $4.2 billion against the indexes (see stunning chart below).
KWN SentimenTrader I 2:5:2016

SentimenTrader continues:  This week, the percentage dropped to -10% for one of the few times since 1993 (see remarkable chart below).
KWN SentimenTrader II 2:5:2016


Today’s Felix Zulauf Interview And Signs That A New Gold Rush Is Now Taking Place

"On the heels of some fireworks in the gold market this week, along with the mining shares, are we seeing signs that a new gold rush is now taking place?
Today KWN will be interviewing legendary Barron’s Roundtable Panelist Felix Zulauf…
But first, the following commentary is from Jason Goepfert at SentimenTrader:  Traders have moved than $750 million into the main gold fund, GLD, over the past week (see chart below).
KWN SentimenTrader I 2:5:2016
Inflows are a good thing as long as they don’t become extreme. This weekly flow is the 2nd-largest since 2012, and it hasn’t taken much of an inflow in the past few years before sellers returned…"

Monday, February 1, 2016

ALERT: Legend Warns Global Governments Are Now Preparing For Total Collapse

"As global markets head into what will surely be another wild trading week, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned that the governments of the world are now preparing for total collapse.
Egon von Greyerz:  Eric, 25% of government bonds are now negative around the world. On Friday morning Bank of Japan was the latest country to introduce negative rates. There are now 13 countries with yields up to 2 years being negative and 10 countries with negative yields up to 10 years. I have been saying for a very long time that Japan is bankrupt and negative rates will of course not save their economy…"

ALERT: Peter Boockvar – We Haven’t Seen Real Chaos Yet, But It’s Coming And Gold Is Going To Skyrocket

"With the price of oil plunging more than 6 percent and the Shanghai Index hitting new lows overnight, today Peter Boockvar warned King World News that we haven’t seen real chaos yet, but it’s coming and gold is going to skyrocket.
Eric King:  “Peter, the game plan is for the West to inflate.  The West has to inflate in order to get out of this debt.  Your thoughts on the central banks, their attempts to create inflation and where that will end.”
Peter Boockvar:  “In theory it makes sense — you inflate your way out of too much debt.  The problem is that bond markets in Europe, the U.S., and certainly in Asia, are so egregiously overpriced that the desire for higher inflation, if they are successful, is going to blow up their bond markets…"

Sunday, January 24, 2016

This Unprecedented Economic Storm Is Just Getting Started

"Today one of the top economists in the world sent King World News an incredibly powerful piece warning that this unprecedented economic storm is just getting started.  Below is the fantastic piece from Michael Pento.
By Michael Pento of Pento Portfolio StrategiesJanuary 23 – (King World News) – Unprecedented Economic Storm
Economic activity dropped significantly in the first quarters of both 2014 and 2015. During that time the economy, as measured by Gross Domestic Product, grew at a paltry -.9% and .6% respectively. And as you would expect, the con artists on Wall Street tried to come up with a myriad of excuses for these poor performances..."

ALERT: Legend Warns Panic Is Coming But Exposes What Is Really Terrifying

"On the heels of another wild trading week in global markets, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned we have not yet seen panic in global markets but he exposed what is really terrifying.
Egon von Greyerz:  “Eric, the current deflationary implosion that we are seeing in markets and commodities is soon going to turn into a hyperinflationary explosion.  The chaos that is happening now is no surprise to the followers of KWN..."

Sunday, January 17, 2016

Keynote Speaker Who Recently Addressed The Federal Reserve, IMF And World Bank Warns Global Chaos To Intensify

"The keynote speaker who recently addressed the Federal Reserve, IMF and World Bank warns global chaos to intensify.
Nomi Prins:  “For 7 years the Fed has provided unnatural liquidity to the system.  Institutional players have gotten propped up by the Federal Reserve, the ECB, the Bank of Japan, the People’s Bank of China, and in other regions throughout the world…


ALERT: Legend Warns This Will Be The Worst Crisis The World Has Ever Experienced

"On the heels of more carnage in global markets to start the new year, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned this will be the worst crisis the world has ever experienced.
By Egon von Greyerz, Founder of Matterhorn Asset ManagementJanuary 17 (King World News) – The Worst Crisis The World Has Ever Experienced
Very few problems start in the centre. Instead trouble normally starts in the periphery. When an empire falls, it is normally the furthest away provinces where trouble starts. It seems insignificant at the time and therefore is ignored by the rulers. Eventually the problem reaches the centre but then it is too late to do anything about it…"

Sunday, January 10, 2016

Shanghai Gold Exchange Year End Gold Withdrawal Numbers

"As of the end of the year the Shanghai Exchange has seen 2,596 tonnes in withdrawals of gold bullion.

Total deliveries since its inception in 2009 are 10,510 tonnes.


We Just Witnessed Something Not Seen Since The 2008 Collapse

"We just witnessed something not seen since the 2008 collapse.
December 8 (King World News) – Jason Goepfert at SentimenTrader:  Early-bird traders have shown some sense of panic.  U.S. stocks have opened more than 1.5% below the previous close on three out of the past four sessions, a rarely-seen level of pre-market concern only seen when traders are fearful of a broken market structure or global financial crisis.
KWN SentimenTrader I 1:8:2016
Even during the depths of a bear market, though, consecutive gaps down like the past two days have recovered enough to close the gaps every time, usually within a week, some comfort for short-term bulls at least..."

Top Advisor To Sovereign Wealth Funds Says Gold And Gold Stocks To Shock Investors With Huge Gains In 2016

"With Wall Street off to its worse start ever in 2016, today a top advisor to the most prominent sovereign wealth funds, hedge funds, and institutional funds in the world, told King World News that gold and gold stocks are going to shock investors with huge gains in 2016.
Wall Street Has Worst Start Ever In 2016
Michael Belkin:  
“In 2016 the indexes have started down with a vengeance.  We’ve entered an extended bear market.  Unfortunately, Eric, I think most people are shell-shocked and kind of caught in a torture chamber in the investment world..."

Wednesday, December 30, 2015

Financial Armageddon Approaches: U.S. Banks Have 247 Trillion Dollars Of Exposure To Derivatives

"Did you know that there are 5 “too big to fail” banks in the United States that eachhave exposure to derivatives contracts that is in excess of 30 trillion dollars?  Overall, the biggest U.S. banks collectively have more than 247 trillion dollarsof exposure to derivatives contracts.  That is an amount of money that is more than 13 times the size of the U.S. national debt, and it is a ticking time bomb that could set off financial Armageddon at any moment.  Globally, the notional value of all outstanding derivatives contracts is a staggering 552.9 trillion dollars according to the Bank for International Settlements.  The bankers assure us that these financial instruments are far less risky than they sound, and that they have spread the risk around enough so that there is no way they could bring the entire system down.  But that is the thing about risk – you can try to spread it around as many ways as you can, but you can never eliminate it.  And when this derivatives bubble finally implodes, there won’t be enough money on the entire planet to fix it.
A lot of readers may be tempted to quit reading right now, because “derivatives” is a term that sounds quite complicated.  And yes, the details of these arrangements can be immensely complicated, but the concept is quite simple.  Here is a good definition of “derivatives” that comes from Investopedia
A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets includestocksbondscommoditiescurrenciesinterest ratesand market indexes.
I like to refer to the derivatives marketplace as a form of “legalized gambling”.  Those that are engaged in derivatives trading are simply betting that something either will or will not happen in the future.  Derivatives played a critical role in the financial crisis of 2008, and I am fully convinced that they will take on a starring role in this new financial crisis.
And I am certainly not the only one that is concerned about the potentially destructive nature of these financial instruments.  In a letter that he once wrote to shareholders of Berkshire Hathaway, Warren Buffett referred to derivatives as “financial weapons of mass destruction”…
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.


IMF Chief Pours Cold Water On Optimistic Yellen, Says Growth "Will Be Disappointing"

"Over the past six or so months, the OECD, the WTO, and the ADB have all come out with rather grim assessments of global growth and trade. 
Back in September for instance, the WTO warned that the rate of growth in global trade is set to trail the expansion of the worldwide economy for the third year running. As WSJ noted at the time,“before the recent slump, the last time trade growth underperformed the rate of an economic expansion was 1985.”
“We have seen this burst of globalization, and now we’re at a point of consolidation, maybe retrenchment,” WTO chief economist Robert Koopman said. “It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”


Puerto Rico To Default On Some Bonds January 1 - Live Feed

"Puerto Rico governor Alejandro Garcia Padilla is set to address the island's debt problem at a press conference on Wednesday.
Nearly $1 billion comes due on Friday, some $330 million of which is GO debt. Because a full payment is next to impossible, Padilla must decide who gets paid and who doesn't..."


The Dire 2016 Predictions Of One Of The Top Economists In The World

"Michael Pento’s 2016 Predictions
The S&P 500 falls more than 20% as it finally succumbs to the incipient global recession.
Janet Yellen states in the 1st half of 2016 that the Fed will not be willing to increase the Fed Funds Rate any further and subsequently hints at another round of QE before the end of 2016.
As a consequence of this tacit admission of failure by the Fed to save the economy from the Great Recession, the US Dollar crashes below 90 on the DXY.
Gold and the miners will be the major winners next year as they will be the primary beneficiary of a global slowdown, continued low nominal interest rates, negative real interest rates and a watershed turn in the value of the USD as the yellow metal surges to $1,250. The second place winner will be shorting high-yield debt (which is currently a profitable trade for PPS clients) and buying put options on high-flying NASDAQ momentum stocks that are trading at monstrous PE ratios and whose prices will collapse because of a deceleration in the US economy.
The Ten-year Note yield will fall below 2% by June on pervading recession concerns.
Finally, after the dust settles from this anticipated huge selloff, there will be a tremendous opportunity from owning high-divided paying foreign stocks, which have already been mercilessly beaten down during the commodity bear market debacle of the last few years.
Why will 2016 be different from 2015: Simply because the Fed has finally started to raise interest rates and will continue to slowly do so until the US economic recession fully manifests. Whether or not Ms. Yellen has finished rate hikes or if the Fed can get in one or two more before the bottom falls out is largely irrelevant. The fact remains that Q4 GDP growth is barely above 1%, according to the Atlanta Fed GDP model. Any additional rate hikes will only expedite the inevitable slowdown as the global recession has already hit US shores. The catalyst for this imminent recession is that asset prices and debt levels have increased to a level that can no longer be supported by incomes and economic growth.
I cannot stress how important the watershed change in US monetary policy will be for markets in early 2016. The major markets (meaning currencies, bonds and equities) have been anticipating a graceful exit from QE and the trillions of dollars’ worth of deficit spending that have been deployed since 2011. In other words, the entire world of capital markets have been banking on the success of central banks. In the vanguard of this belief has been the universal carry trade of going long the dollar and equities, while shorting precious metals..."

Paul Craig Roberts – This Now Threatens To Destroy Our Civilization

"...As we enter into 2016, Western civilization, the product of thousands of years of striving, hangs in the balance. Degeneracy is everywhere before our eyes. As the West sinks into tyranny, will Western peoples defend their liberty and their souls, or will they sink into the tyranny, which again has raised its ugly and all devouring head?"


Sunday, December 27, 2015

Shanghai Gold Withdrawals Top 2500 Tonnes For This Year

"With 57.75 tonnes withdrawn in the latest week, the number of tonnes of gold bullion withdrawn from the Shanghai Gold Exchange stands at 2,503 tonnes for the year to date.

This is the most gold ever withdrawn from this or from any exchange in a single year that I can find in the post-WW II era.

And this record breaking phenomenon is for the most part being ignored.  It seems in retrospect almost unprecedented, and is particularly odd given the relative  'drying up' of deliveries of physical gold in NY and the shrinking of the 'free gold float' inventories in London.  

Lessons From The Late '20s - Why Bubbles Abound

"Excerpted from Doug Noland's Credit Bubble Bulletin,
They finally did it – 25 bps, for the first rate increase since 2004. Surely it’s the most dovish Fed “tightening” ever. Indeed, it was really no tightening at all. One has to go all the way back to 1994 for the last time the Federal Reserve commenced a true tightening cycle. That episode proved so destabilizing that the Federal Reserve assured the markets that they’d learned their lesson. And this (dovish and market-pandering) mindset was fundamental to the little baby step rate increases that ensured no tightening of financial conditions throughout the historic 2002-2007 mortgage finance Bubble inflation.
This week’s policy move will be debated for years to come. Lost in the debate is how the Fed (along with global central bankers) found itself stuck at zero for seven years (with a $4.5 TN balance sheet) and then saw it necessary to move to raise rates in the most gingerly, market-pleasing approach imaginable.
Traditionally, tightening cycles are necessary to counter mounting excess, including ill-advised lending, speculating and investing. Rate increases back in 1994 exposed what had been a dangerous expansion in speculative leveraging, derivatives and market-based Credit (at home and abroad). With the “bond” market in disarray and Mexico at the precipice, the Greenspan Fed turned its attention to bolstering the markets and non-bank Credit more generally.
Market-based Credit is unstable. This remains the fundamental issue – the harsh reality – that no one dares confront..."