I Don’t See How Germany Can Contain the Deutsche Bank Collapse

Let’s talk about Deutsche Bank (DB).
Deutsche Bank is the 11th largest bank in the world. It has assets of $1.8 trillion and over ~$60 trillion in derivatives on its books.
From a balance sheet perspective, DB’s balance sheet is 50% the size of Germany’s GDP. By way of comparison, imagine if JP Morgan was a $9 TRILLION bank. That’s effectively DB’s status in Germany.

Donald Trump Post Debate Meltdown, Betfair Betting Market Points to Collapse in Odds of Winning

According to the betting markets It appears Donald Trump’s campaign is in full meltdown mode in the wake of Trumps loss to Hillary in the first debate following which instead of Trump’s campaign trying to learn lessons from the defeat, instead has increasingly witnessed delusional Trump claiming victory and doubling down on by basically magnifying that which lost him the debate in the eyes of the voters as illustrated by calling into Fox and Friends that literally had the presenters grimacing in response to some of the statements that Trump was making such as being in the lead in fictitious opinion polls and then trying to defend the fat Miss Universe saga.

After the Debate, the Deluge?

Dear Debate-Watchers,
“I guess he is a buffoon after all. Too bad.”
Those words were written by a dear friend and, until the lights went out on the first presidential debate, the most ardent of Trump supporters.
For the debate, a group of us had gathered at the Social Club at La Estancia de Cafayate here in the Argentine outback.

Has Dow Theory Lost its Relevance: Stock Market Ignored it and Rallied to New Highs

“A stop sign is a gift for you to learn that moving in the same direction won’t take you any place new.” ~ Rex Steven Sikes

The transports topped out in November of 2014, and according to the Dow theory this is a big negative; the Dow industrials should have followed suit. Instead, the Dow soared higher paying no heed to this theory proving to a large degree that this theory has lost its value. After all, it is a theory and the definition of a theory is “a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.”

The Fed Is Leading Us to Economic Hell

The Fed argues that low rates have worked. The economy emerged from recession. Unemployment drifted back down. “Yay for us,” said the Fed.
Don’t buy that statistical economic garbage. The economy recovered in spite of Fed policy, not because of it. The economy recovered because business owners, entrepreneurs, and workers rolled up their sleeves and made things happen.

Today’s Fed Makes Volcker Look Timid

Let’s look at the Fed’s (and other central banks’) magnitude of monetary manipulation in recent years and the very constrained maneuvering room they now have as a consequence.
Of course, it’s questionable whether they should even be trying to maneuver the economy to the degree that they are. The current problem is a direct result of mistakes made during and after the last financial crisis.

Silver Way Undervalued

After rocketing higher mid-year, silver has spent most of the third quarter drifting sideways to lower.  This has naturally weighed on sentiment, with investors and speculators alike growing more bearish during recent months.  Yet silver remains way undervalued relative to its primary driver gold, so silver’s young bull market is far from over.  This metal’s upside from here is still massive as it mean reverts higher with gold.
Silver has always been exceptionally volatile, which is partially a function of this market’s relatively-small size.  The world’s leading authority on global silver supply and demand is the venerable Silver Institute.  It reported total worldwide silver demand of 1170.5m ounces in 2015.  At last year’s average silver price of $15.68, that works out to an annual market value of $18.3b.  That’s practically a rounding error!

Stock Market Nasty Pullback Day

The stock market indices had a rough, volatile session and closed very weak. The day started out with some back and forth action, they pulled back midmorning, and was successful. They then rallied back to resistance, and then they plunged, acerbated by news that Emergent BioSolutions, Inc. (EBS) was having problems with withdrawals. Panic set in to take it to minus 15.44, and then they had a sharp rally acerbated to the upside when it was announced that QUALCOMM Incorporated (QCOM) may be acquiring NXP Semiconductors NV (NXPI). The semi-conductors took off and took the market with it. Biotech’s suffered all day, though, and in the afternoon the indices did pull back and closed near support.

Green Light For Stock Markets In 2017

We believe the stock market correction is running its course. The seasonally weak month of September has only produced one significant down day. Our expectation was that the retracement would take stocks between 5% and 10% lower, as explained in ALL Markets Going Down Except The US Dollar.
However, it seems that the stock market is quite resilient. Two weeks after that strong down days, we have not seen any meaningful sign of a continuation of that retracement. That does bode well for an end of year rally, and, even more important, continued strength in the stock market into 2017.

Donald Trump Failing to Recover After 1st Debate Hillary Shimmy Loss – Betfair Betting Market

The betting markets tend to be better short-term gauge for reactions to political events such as the debates. In which respect Donald Trump is showing NO signs of recovering from Monday’s debate loss, instead the Betfair market odds have continued to widen from 2.88 (Trump) / 1.57 Hillary just prior to the start of the debate at 2am BST, which following the debate at 4am had widened to 3.35 (Trump) / 1.44 Hillary) and now 3 full days later the betfair market price is 3.45 (Trump) / 1.45 Hillary. Thus Hillary is continuing to capitalise on Trumps debate loss by widening her lead further, which means whatever post debate strategy Trumps team is deploying is just not working!

GOLD MARKET FLASH NOTE: Ending With a Bang, Not a Whimper

Rudi Fronk and Jim Anthony, co-founders of Seabridge Gold, discuss how extreme monetary policy does not stimulate growth.

As we have predicted for some time, central bankers are doubling down on the madness that has failed to achieve economic lift-off. It is no surprise to us that easy money has not stimulated growth. There was never any reason why it should. It reminds us of trying to force hay into the wrong end of an elephant.

Gold vs. Paper: The Only Debate That Matters

While a record audience watched the first presidential debate between Hillary Clinton and Donald Trump, the sad truth is that the candidates differ very little on the issues that matter most. As president, both Clinton and Trump are likely to drive the country deeper into debt, expand government power, and further curtail individual liberty and economic freedom. Though we can vote against the candidate we feel will accelerate this trend, our votes may do nothing to change the direction we are headed.

Mining Stocks’ Rally Despite Gold’s Decline

Quite a few rallies in the recent months were preceded by the mining stocks’ outperformance relative to gold and we just saw the same kind of phenomenon on Wednesday – GDX rallied while gold declined. Is the bottom in?
Let’s take a look at the miners’ chart for details – other charts don’t feature important changes from what we described previously so mining stocks are the part of the PM sector that we’ll focus on in today’s free article (charts courtesy of http://stockcharts.com):

BEA Revises Q2 2016 US GDP Growth Upward to 1.42%

In their third and final estimate of the US GDP for the second quarter of 2016, the Bureau of Economic Analysis (BEA) reported that the growth rate was +1.42%, up +0.33% from their previous estimate and up +0.59% from the prior quarter. Most of the improvement in the headline number came from a +0.24% upward revision in commercial fixed investment. None of the other revisions were statistically significant.

What a Trump Win Means for The Stock Markets? Disaster or Buying Opportunity

“As a man handles his troubles during the day, so he goes to bed at night a General, Captain, or Private.” ~ Edgar Watson Howe

We would like to state that this article is not about politics but about the effect these two polarising individuals will have on the market.  Before the debate, the outlook was somewhat favourable towards the Donald and immediately the markets reacted and started trending lower. Regardless of what you think of Trump, he is having the same effect as Brexit had on the markets but in smaller doses. If he should win the election, then the reaction will be several magnitudes larger. When the poll results came in stating that Hillary fared better in the 1st debates the markets responded positively and recouped their losses; this reinforces our argument of several years that says substantial pullbacks should be viewed as buying opportunities.

SPX is at the 80% retracement. Will it turn here?

Good Morning,

Thus far the SPX has made an 80% retracement. Normally this would be a dubious distinction, since the odds grow of making a new high beyond the 78.6% retracement. However, this seems to be standard operating procedure for this top, so we’ll have to monitor it as it develops. Being the end of the quarter doesn’t help the bearish cause, but a lot of big name stocks are not making new highs, which is a first.