from Bill Still
The $6 Trillion Public Pension Hole That We’re All Going to Have to Pay For
Why your state’s public pension plan is in a much bigger hole than you already fear
by Ed Bartholomew and Jeremy Gold
Market Watch
U.S. state and local employee pension plans are in trouble — and much of it is because of flaws in the actuarial science used to manage their finances. Making it worse, standard actuarial practice masks the true extent of the problem by ignoring the best financial science — which shows the plans are even more underfunded than taxpayers and plan beneficiaries have been told.
The bad news is we are facing a gap of $6 trillion in benefits already earned and not yet paid for, several times more than the official tally.
Pension actuaries estimate the cost, accumulating liabilities and required funding for pension plans based on longevity and numerous other factors that will affect benefit payments owed decades into the future.
CPI Flat: Hooray, Housing and Medical Prices Jump
by Mike ‘Mish’ Shedlock
Mish Talk
When people start cheering rising medical and rent prices as welcome “progress”, you know they belong back in the 5th grade along with economist Paul Krugman.
Today, some unknown Econoday writer cited such “progress” in regards to today’s reported CPI numbers even though month-to-month the CPI came in at zero.
Highlights
The headlines for the consumer price report look very soft but there are important offsetting pressures. The CPI came in unchanged in July, pulled back by a 1.6 percent monthly decline in energy prices and other weakness including flat prices for food and contraction in transportation. And it doesn’t look much better when excluding food & energy where the gain for the core is only 0.1 percent.
Ralph Acampora & Chris Waltzek on GoldSeek Radio – Aug. 16, 2016
by Chris Waltzek
GoldSeek Radio
Leading Wall Street technician, Ralph Acampora of Altaira Wealth Management returns with his technical view on the markets. Nearly 50 years ago, Stevenson and Bear (1970) outlined an alternative to the EMH, suggesting that markets sometimes display years of long-memory (trends), which can yield oversized expected returns (Waltzek, 2016). Our guest highlights the importance of key investing factors: price, time and sentiment, culminating in a fusion investing approach at the core of the Chartered Market Technicials (CMT) exam. Fusion investing involves combining economic themes, fundamentals and technical analyses. Reminiscent of the chess match between Russian Grandmaster Gary Kasparov vs. Deep Blue, IBM’s super-computer where human programmers and computers joined forces to accomplish the unimaginable, the fusion approach yields a nearly invincible investment approach. Regarding US equities, Ralph Acampora prefers the contrarian perspective, noting he’s “very excited, because no one else is…”
The Idea of the Fed Raising the Inflation Target is Outrageous
Peter Boockvar, the chief market analyst for the Lindsey Group
by Peter Boockvar
CNBC.com
I can’t let an opportunity go by without criticizing a Fed official. I believe their feet should be held to the fire after creating a huge asset price bubble and culture of debt that is dragging down economic growth.
Fed President John Williams comments yesterday really got me angry. First, he suggested possibly raising the Fed’s 2 percent inflation target. This reflects an amazing cluelessness of the damage this would do if realized.
We are in an epic bond bubble globally where higher inflation would be kryptonite. With the bond monster central bankers have created, the last thing they should want is higher inflation.
Nasty Politics and “Low-Information Voters” Are Nothing New
by Ryan McMaken
Mises.org
During this year’s election cycle, the mainstream media has told us to believe that there is something shockingly nasty about the tone of this year’s contests. CNBC typifies this line of thinking with an article titled “Trump v Clinton: Why this election could be the nastiest in history.”
For anyone with a working familiarity of past political rhetoric, this claims strikes one as rather implausible. After all, accusing someone of being likely to destroy the world in a nuclear holocaust, as Johnson clearly did of Goldwater in 1964, is a pretty”nasty” thing to do. Moreover, critics of Ronald Reagan were not exactly known for their reticence, with Reagan and his advisors being called racist, “feeble-minded,” “senile,” “demented,” and “hypocritical,” in both public and private comments by his detractors.
33,000 Americans Have Deposited $1.8 Billion In Savings With Goldman Sachs
from Zero Hedge
One year ago, the FDIC-backed hedge fund and central banker incubator known as Goldman Sachs prompted some head scratching when it announced that it would become an actual bank following its purchase of GE Capital Bank’s online deposit platform, allowing ordinary retail depositors to park their cash with the bank. The reason for the confusion was simple: with a $900 billion balance sheet, Goldman did not need the extra funds. Just as confusing, Goldman was paying one of the highest interest rates in the country: at 1.05%, this is more than virtually any other comparable bank or financial institution was willing to give depositors every year they parked their savings with the bank. Superficially, it would suggest Goldman urgently needed the funds which, at least as of this moment, could not be further from the truth.
Report: Secret Service Insiders Confirm: ‘Hillary Suffers From Parkinson’s… Experiences Seizures From Camera Flashes’
by Mac Slavo
SHTF Plan
Several weeks ago the mainstream media began to paint a narrative of Donald Trump having mental issues and being unfit for the Presidency. Curiously, within a matter of days, stories began to emerge of bizarre behavior from Democrat Presidential candidate Hillary Clinton. As it turns out it may be Clinton that is unfit for the Presidency.
From falls and difficulty climbing stairs to stage panic in the face of protest chants and nonsensical statements to her audience, something appears to be wrong with the former Secretary of State. In fact, even Hillary’s closest aide, Huma Abedin, noted in an email to a State Department employee that Hillary is “often confused.”
Now, according to Kit Daniels of Infowars, inside sources within the Secret Service are leaking information that appears to confirm what many already know:
Global Central Banks Dump U.S. Debt at Record Pace
by Patrick Gillespie
CNN Money
Global central banks are unloading America’s debt.
In the first six months of this year, foreign central banks sold a net $192 billion of U.S. Treasury bonds, more than double the pace in the same period last year, when they sold $83 billion.
China, Japan, France, Brazil and Colombia led the pack of countries dumping U.S. debt.
It’s the largest selloff of U.S. debt since at least 1978, according to Treasury Department data.
“Net selling of U.S. notes and bonds year to date thru June is historic,” says Peter Boockvar, chief market analyst at the Lindsey Group, an investing firm in Virginia.
Technically Speaking: A Bull Market In Complacency
by Lance Roberts
Real Investment Advice
On Monday, the markets hit new “all-time highs.” That’s the good news.
The bad news is that such is occurring on a rapid decline in volume as shown in the chart below.
[…] While volume by itself is not a great indicator from which to manage money by, it does lend credence to the level of participation in the market’s advance. Volume, like volatility which we will discuss in a moment, is most useful in denoting turning points in the market. Historically, volume tends to begin increasing just prior to, and during, a market decline.
While declining volume does not suggest the current advance is over, it is worth paying attention to when it turns higher.
Yes, We Do Have Inflation, We Do Have Inflation Today
by Lee Adler
Wall Street Examiner
This should be news to no one. The Bank of Japan dropped interest rates below 1% more than 20 years ago and to zero in 1999 and their CPI has been zero ever since. The US has had ZIRP and very low inflation since 2009. Central banks ignorantly and willfully ignore these facts. Instead, they impose policies that foster wild speculation and financial engineering schemes. These policies benefit no one but speculators, hedge fund managers, and corporate executives.
Cartel on the Precipice
by Andrew Hoffman
Miles Franklin
I have watched every tick of the Precious Metals market for 14½ years, since the fateful day in May 2002 when I bought my first 100 shares of Newmont Mining, en route to putting essentially all of my liquid assets into the sector. Frankly, the 1% position I have taken in Bitcoin is as exciting as any development in my investment career – as until Bitcoin, I have not come across any asset class since 2002 worth investing in. And by investing, I mean the classical definition of such, not today’s bastardized concept of speculating in overvalued assets based on the expectation of what Central banks and government manipulation operatives might do. To borrow from Richard Russell’s lingo, I take big positions in primary trends I deem to have extremely high return/risk profiles. And the more confident I am in such a trend, the more I invest. Hence, my 1% position in Bitcoin, versus 90% in physical Precious Metals.
U.S. ‘Debt Held by Public’ Tops $14,000,000,000,000; Up 122% Under Obama
by Terence P. Jeffrey
CNS News
(CNSNews.com) – The federal government’s “debt held by the public”—as opposed to its “intragovernmental debt”—has topped $14,000,000,000,000 for the first time in history, according to the latest numbers released by the U.S. Treasury.
As of the close business on Aug. 10, the “debt held by the public” was $13,987,862,462,404.79, according to the Treasury. By the close of business on Aug. 11, it had risen to $14,012,831,105,933.15. By close of business on Aug. 12, it had increased again, hitting $14,012,909,909,536.53.
How Bloomberg Spun its Own Poll Data to Make Hillary Clinton Seem Inevitable
by Michael Krieger
Liberty Blitzkrieg
Years ago, when I was an exchange student in the Soviet Union, a Russian friend explained how he got his news.
“For news about Russia, Radio Liberty,” he said. “For news about America, Soviet newspapers.” He smiled. “Countries lie about themselves, tell truth about others.”
American media consumers are fast approaching the same absurd binary reality. We now have one set of news outlets that gives us the bad news about Democrats, and another set of news outlets bravely dedicated to reporting the whole truth about Republicans.
Like the old adage about quarterbacks – if you think you have two good ones, you probably have none.
– From Matt Taibbi’s excellent article: The Summer of the Shill
A couple of days ago, investigative journalist Sharyl Attkisson published a very interesting article which examined how Bloomberg News egregiously spun the results of its recent presidential poll.
She notes:
With Global Gold Reserves Nearly Exhausted, Can Anyone Spell Weimar?
from King World News
With global gold reserves nearly exhausted, can anyone spell Weimar?
From The Guardian: “With global gold reserves nearly exhausted, and prices up by 360% in the past decade, this massive supply-and-demand imbalance has fuelled organised crime syndicates looking for new sources of revenue, researchers say, with the result that Peru and Colombia – the world’s top cocaine exporters – now earn more from illegal gold exports than cocaine exports.”
This “Shady Practice” Is Keeping Stocks Afloat
by Justin Spittler
Casey Research
Corporate America is doing whatever it can to prop up the stock market.
As you’ve probably noticed, U.S. stocks are rallying. Yesterday, the S&P 500, Dow Jones Industrial Average, and NASDAQ all hit new all-time highs.
You might find it odd that stocks have broken out to record highs. After all, the global economy is clearly headed in the wrong direction. Stocks are expensive. And Corporate America is struggling to make money.
As of Friday, 91% of the companies in the S&P 500 have shared second-quarter financial results. Based on these numbers, second-quarter earnings for the S&P 500 are on track to decline 3.5% from last year. This would mark the fifth straight quarter of falling earnings.
The New Gold Rush: Insurance Against the Collapse
by JL Yastine
The Sovereign Investor
I get this question all the time from people: Why should I bother owning physical gold or any other precious metal like silver or platinum?
What’s my answer? I tell them owning precious metals is an insurance policy, plain and simple. And with central banks doing what they do best — dropping interest rates down to zero and putting the money printing presses into overdrive — boy, do we need some insurance these days.
Think about it. Let’s use another kind of wealth protection — fire insurance — as an example.
Is the Recent Consolidation Signaling a Top in the Metals Complex?
by Avi Gilburt
Gold Seek
This past week certainly saw a lot of action in the metals, but we did not see any real movement by the time we closed the week. In fact, gold and silver ended near where they began for the week, whereas GDX did have a little upside progress on the week.
And, after each consolidation we have experienced during 2016, voices are raised about us topping. Many believe we have come too far, too fast. However, each consolidation we have seen throughout the year has only led us to higher prices. So, in truth, I cannot accept the premise that the market is topping unless some amount of upper support is broken.
Oil Headwinds Become Tailwinds
by Kurt Kallaus
Financial Sense
Oil prices rising from $26 to $46 a barrel this year have helped boost US stocks a whopping 22% from their lows. The digital age led by Amazon and overcapacity of retail space per capita may be killing retail bricks and mortar, but the dirty old energy-driven industrial economy still holds some sway over the economy and the stock market.
While many factors move stocks, the headwinds or tailwinds from oil are well correlated. Corporate earnings have been in a tailspin since early 2015 as enormous losses in the energy and raw material sectors weighed on GDP and profits. Stocks don’t need ever higher oil prices, which would eventually be negative, but they need stability and relief from the continual downside shocks that climaxed in January-February 2016.
Gold Daily and Silver Weekly Charts – De Trop
Today was a very sleepy day, and the markets were ‘dull.’
As noted below, there is a stock option expiry on Friday.
I put the finishing touches on an interview with Lars Schall for Matterhorn Asset Management today, answering some final questions. It was more heavily into presidential politics and some other world events than I normally address. But of course the conversation turned to gold and silver.
And I have to admit that thinking about these things and putting them into words over the weekend left me in a bit of a funk. In general, most politicians make me nauseous, and this particular election between these two creatures and their minions can be a bit disheartening. As Jean-Paul Sartre observed:
E-Commerce Retail Sales Jump 4.5%: Two Perspectives
by Mike ‘Mish’ Shedlock
Mish Talk
E-Commerce sales jumped a strong 4.5% but before anyone gets too excited by the sales growth, E-Commerce represents only 8.1% of sales. Second, seasonal variations are in play.
E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over the internet, an extranet, Electronic Data Interchange (EDI) network, or other online system. Payment may or may not be made online.
Bloomberg Econoday reports “The non-store component has been a leading strength of the monthly retail sales report, making the strong 4.5 percent quarter-to-quarter gain for second-quarter ecommerce sales no surprise. Year-on-year, ecommerce sales were up 15.8 percent in the quarter. As a percentage of total retail sales, ecommerce continues to move higher, up 2 tenths to 8.1 percent.”
This Tipping Point Could Easily Escalate To World War III: Putin Says “The Threat of Nuclear War Is Very Real”
by Mac Slavo
SHTF Plan
[…] General Shirreff isn’t alone in his thoughts, and those reflections are not unfounded. The Russian annexation of Ukraine was in 2014, and this (as has been mentioned ad infinitum) was in response to the ousting of the Ukrainian president and the insertion of Yatsenuk, a U.S. State Department creation of Victoria Nuland and Senators McCain and Graham. The annexation was specifically to secure Sevastopol and prevent the Russian naval base from falling into the hands of the Ukraine-U.S.-NATO-IMF hegemony.
That being said, on August 10, 2016 two Russian soldiers were reported killed by the Ukrainian military in two separate cross-border raids. One FSS officer was killed August 7th and one soldier was killed August 8th. Now keep in mind: the FSS (Federal Security Service) that controls border guards for Russian territory (in this case Crimea) is also known as the FSB, or the Federal Security Service of the Russian Federation, (in Russian) Федеральная служба безопасности Российской Федерации (ФСБ). They are the agency that inherited the responsibilities of the KGB of the USSR when it collapsed.
The Preservation of Perks, Privileges, and Power: The PPPP
by Gary Christenson
Deviant Investor
The picture is clear – The Powers-That-Be in Wall Street and Washington, the “Deep State,” military contractors, Big Pharma, Big Ag, The Federal Reserve, Mainstream Media, the DNC and RNC, and others want to maintain the transfer game … because the following will continue:
- The transfer of wealth to the political and financial elite
- Payoffs to the President, Congress, and lobbyists
- Military adventures – very costly adventures – must be maintained to feed the massive military-industrial-security complex
- Ever increasing debt
- Power and influence over institutions and other countries
But if the Powers-That-Be had managed well and created a healthy global financial system, would the following exist?