It could be a wild weekend in late June if all the crises come to a head
by Matthew Lynn
Market Watch
LONDON (MarketWatch) — The hedge funds will have prepped their positions. The investment banks will have ordered in pizza and extra coffee ready for a long night of dealing. Exit polls will have been commissioned, and currency traders will be ready to buy or sell sterling GBPEUR, -0.9223% as soon as they start getting a clear idea of whether Britain has voted to stay in or get out of the European Union on June 23.
But hold on. In fact, it is not just the risk of Brexit that the markets need to be worrying about. In truth, the real drama is going to come over a long and difficult weekend, leading up to potentially wild day in European assets on Monday, June 27.
After reading the title, you may expect me to say something like “let my metals go.” And, you are likely quite right. So rather than afflicting you with the plague of darkness, allow me to illuminate how I view the market as it currently resides.
We’re supposedly living in the age of startups when people can create new businesses, enrich themselves, and employ their fellow Americans. That narrative, like much economic optimism these days, is now mostly a tale for coastal cities, and a tenuous one at best.
Sell in May and go away is the oldest investing trick in the book.
This about sums up the US economy in more than one way.
Good Day… And a Wonderful Wednesday to you! And Welcome to June! Pfennig Tradition says that we start the month of June with this: June is bustin’ out all over, all over the meadow and the hill. Buds are bustin’ outa bushes and the rompin’ river pushes Every little wheel that wheels beside the mill! June, June, June, Just because it’s June! The Moody Blues greet me this morning with their song: New Horizons, which is a beautiful song from the Seventh Sojourn album, which is as I’ve stated many times before, is one of the 10 albums I would take to the island with me… 
White teenage unemployment is about 14 percent. That for black teenagers is about 30 percent. The labor force participation rate for white teens is 37 percent, and that for black teens is 25 percent. Many years ago, in 1948, the figures were exactly the opposite. The unemployment rate of black 16-year-old and 17-year-old males was 9.4 percent, while that of whites was 10.2 percent. Up until the late 1950s, black teens, as well as black adults, were more active in the labor market than their white counterparts. I will return to these facts after I point out some elitist arrogance and moral bankruptcy.
Today’s guest, Parag Khanna is a best-selling author in addition to being a CNN Global contributor and Senior Research Fellow at the Centre on Asia & Globalisation at the National University of Singapore. He shares with us many of the facts and figures behind his new book, Connectography: Mapping the Future of Global Civilization. His book highlights what he believes to be the two major irreversible, mega-trends of humanity, urbanization and infrastructural connectivity. When discussing the U.S., Mr. Khanna says the U.S. should be re-mapped physically and better internet connectivity and better transport systems should be put into place in the next 5-10 years.
Europe’s president Donald Tusk has warned EU leaders in the bluntest terms that their “utopian” illusions are tearing Europe apart, and that any attempt to seize on Brexit to force through yet more integration would be a grave mistake.
Bill Murphy from GATA.org returns to the show with his latest insights on the PMs sector. He notes that market dynamics have changed. For instance, gold prices are off to their best start in a decade, while the value of more than 10 major mining companies have doubled. In the first quarter, about 1,100 fund managers including billionaire George Soros bought more than 78 million shares of Barrick Gold Corp., the world’s biggest producer. Hedge fund legend, Stanley Druckenmiller continues to add gold to the portfolio following record QE by monetary policymakers in Japan, EU, and the US. Druckenmiller bought 1.8 million shares of Barrick (ABX), up over 100% this year. Several of his colleagues concur that gold does not carry a negative interest rate such as negative yielding bonds that actually punish savers.
All the Asian indices performed well today and mainly off the back of the rumors that China -Shares are to be included in the MSCI soon. These were only rumors but we did see a 3.3% rally on the beck of the story. Also, on the back of a better than expected Japan Industrial Output (+0.3% against an expected -1.5%) the Nikkei rallied almost 0.9% whilst the Hang Seng joined the party with a matching 0.9% rally. In late US trading the Nikkei futures have lost all of today’s cash gains and are currently trading 1% lower.
President Obama says that the feckless world leaders who squandered their taxpayers’ money on last week’s G-7 junket to Japan are “rattled” by Donald Trump.
[…] If I had to choose one single institution and one single individual most responsible for the weak, putrid and unbelievably corrupt oligarch-controlled U.S. economy, I would choose the Federal Reserve and Ben Bernanke.
[…] Just two hours before it was barred from issuing any more fatuous propaganda about Brexit, the UK Treasury last week managed to surpass themselves. They warned that if the UK left the EU, the hit to each individual British pensioner would amount to £137 per year. Those with an additional pension pot worth £60,000 would apparently be worse off to the tune of £1,900. (The “forecasts” arrived conveniently alongside news that net migration into the UK had risen to a third of a million people in 2015.)
Ludwig von Mises didn’t like references to the “miracle” of the marketplace or the “magic” of production or other terms that suggest that economic systems depend on some force that is beyond human comprehension. In his view, we are better off coming to a rational understanding of why markets are responsible for astounding levels of productivity that can support exponential increases in population and ever higher living standards.
The suicide squeeze play in baseball is a sight to behold. It is filled with tension because it involves a binary outcome. The runner trying to make it home from third base will either be safe or out. There is no middle ground.