More Declines in Durable Goods; Economists Hardest Hit

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

Durable goods continue to contract, with August down year-over-year in both shipments and orders now. New orders have been contracting since February (with January barely positive) at an almost steady rate near -3% the last few months, while shipments did not see a negative rate until May (and were slightly positive again in June). In capital goods, the pattern is the same though the disparity worse. The 6-month average for capital goods orders is now -3.72%, while for shipments +0.35%.

Those figures would seem to reflect the disparity viewed from inventory. Given lags in the supply chain, the fact that shipment expansion seems to be climbing over the edge may signal the expected change in economic perception about the inventory “bulge.” That would be consistent with the sales environment, particularly wary outlooks now for the Christmas season that was only a “transitory” away, as the mainstream has told us, from a blowout.

ABOOK Sept 2015 Durable Goods ex TransABOOK Sept 2015 Durable Goods Cap GoodsABOOK Sept 2015 Durable Goods Cap Goods New Orders

Continue reading

Russia’s False Hopes

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

Russia so desperately desires to be part of the disreputable and collapsing West that Russia is losing its grip on reality.

Despite hard lesson piled upon hard lesson, Russia cannot give up its hope of being acceptable to the West. The only way Russia can be acceptable to the West is to accept vassal status.

Russia miscalculated that diplomacy could solve the crisis that Washington created in Ukraine and placed its hopes on the Minsk Agreement, which has no Western support whatsoever, neither in Kiev nor in Washington, London, and NATO.

Russia can end the Ukraine crisis by simply accepting the requests of the former Russian territories to reunite with Russia. Once the breakaway republics are again part of Russia, the crisis is over. Ukraine is not going to attack Russia.

Russia doesn’t end the crisis, because Russia thinks it would be provocative and upset Europe. Actually, that is what Russia needs to do—upset Europe. Russia needs to make Europe aware that being Washington’s tool against Russia is risky and has costs for Europe.

Instead, Russia shields Europe from the costs that Washington imposes on Europe and imposes little cost on Europe for acting against Russia in Washington’s interest. Russia still supplies its declared enemies, whose air forces fly provocative flights along Russia’s borders, with the energy to put their war planes into the air. Continue reading

Bank of England and LBMA Gold Vaults – The “London Float”

Submitted by Mark O’Byrne  –  GoldCore

A case study of physical gold stored in London Vaults in LBMA 400 troy ounce gold bars has been undertaken by Ronan Manly, Koos Jansen, Bron Suchecki and Nick Laird.

GoldCore: LBMA Vaulted Gold in London

Nick Laird has just completed a great article replete with many interesting and important charts which further illuminate the size of the “London Float” which is the working supply of gold available to meet the gold markets daily needs and huge international demand for gold today – especially from Germany, India and China.

The size of the “London Float” is examined and brought “out of the shadows and into the light of day”.

[Please click chart to expand]

GoldCore: Vaulted Gold in London

Jesse’s Cafe Americain via Sharelynx – please click image to expand

Laird concludes that there is an increasing shortage of physical gold bullion in LBMA vaults and on the COMEX due to the continuing flows of gold east to “satisfy the current rampant Asian demand”.

The full article and excellent charts can be accessed here. Continue reading

Uncomfortably Revisiting Yellen’s Bubble Doctrine

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

There is growing turmoil in buybacks that threatens the very fabric of the stock bubble. That was always the primary transmission of the foundation of its current manifestation, corporate debt, into asset prices; especially the huge run following QE3 and QE4. As represented by the S&P 500 Buyback Index, this liquidity propensity has found a durable reverse. After peaking all the way back in late February, the index is now more than 12% below that level after sustaining the August 24 liquidation.

ABOOK Sept 2015 Stock Bubble Indices

The fact that this reversal is seven months in the making more than suggests a potential major shift. As the NYSE Composite, stocks were not long for continued momentum against the “dollar.” Buybacks seemed to have weathered the first piece of the first “dollar” wave, but as junk debt there was always conjoined a limit.

Some say expectations around the Federal Reserve have a lot to do with the buyback decline. Even though the central bank elected to keep its benchmark rate near zero Thursday, fears of higher rates are causing companies to rethink their capital return program, posits Boris Schlossberg of BK Asset Management.
“Even though rates have not gone up, we clearly are in a tightening position in terms of monetary policy, and I think they’re looking ahead and saying, ‘Do I really want to finance this thing with no-longer-cheap money that we used to have a couple months ago?’” Schlossberg said Tuesday in a ” Trading Nation ” segment.

I have little doubt that the causation effect claimed above is slightly misplaced, as “monetary tightening” isn’t the Fed so much as the eurodollar standard; that is just one mainstream method of trying to reconcile what is now seen with the financial plumbing remained misunderstood and largely hidden. As with the junk bond bubble, there is undoubtedly a correlation between re-assessing stock repurchases and the bald reductions of issuance in corporate credit. That hasn’t changed throughout this year, instead having gained further in this second “dollar” wave. Yet again, we see the “dollar” intrude in unwelcome fashion (to the bubbles). Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

EU Refugee Summit In Disarray, Greatest Refugee Tide ‘Yet To Come’ (Guardian)
China Consumers Tighten Belts, A Red Flag For The Global Economy (Reuters)
China Prosecutor To Intensify Financial Markets Crackdown (Reuters)
China Is Sitting on an Ocean of Diesel Fuel (Bloomberg)
Bill Gross: “Mainstream America Is Being Slowly Cooked Alive” (Zero Hedge)
Deflation Supercycle Is Over As World Runs Out Of Workers (AEP)
Volkswagen Could Pose Bigger Threat To German Economy Than Greek Crisis (Reuters)
UK, France And Germany Lobbied For Flawed Car Emissions Tests (Guardian)
Volkswagen Emissions: Automakers’ Tobacco Moment? (CNBC)
Volkswagen Test Rigging Follows a Long Auto Industry Pattern (NY Times)
VW Chief Winterkorn Steps Down After Emissions Scandal (Bloomberg)
Volkswagen CEO Likely to Get $32 Million Pension After Leaving (Bloomberg)
What Volkswagen’s Crisis Could Mean for Auto Asset-Backed Securities (Alloway)
VW Recall Letters In April Warned Of An Emissions Glitch (Reuters)
How Smog Cops Busted Volkswagen and Brought Down Its CEO (Bloomberg)
West Virginia Engineer Proves To Be A David To VW’s Goliath (Reuters)
Forget ‘Developing’ Poor Countries, It’s Time To ‘De-Develop’ Rich Countries (Guardian)
‘Downsizing Could Free Up 2.5 Million British Homes’ (Guardian)
Prepare For A Catastrophic NHS Winter Meltdown (Guardian) br />

Read much more here: Debt Rattle September 24 2015 –