Despite falling oil prices, the Organization of Petroleum Exporting Countries (OPEC) voted on November 27th not to cut production in order to boost prices. The key to this decision appears to have been the attitude of Saudi Arabia, which has long been the first among equals in the coalition. Not surprisingly, the decision led to further oil price declines, and led many observers to conclude that OPEC has largely lost the ability to upwardly influence the price of petroleum. But this determination ignores the wider geopolitical considerations that may be convincing Saudi Arabia to be perfectly content, for now, with lower prices.
It turns out the Swiss referendum last weekend which sought to force the Swiss National Bank to maintain 20% gold reserves was a red herring so far as precious metal markets are concerned. It was fairly obvious before the referendum that no sensible trader would had bought gold in the expectation it would go through, so there would be few short-term sellers afterwards. Equally, it was so obvious to traders the referendum would fail that there may have been some short-sellers, or perhaps deferred buying waiting for the event to pass.
Each commodity market has its own story to tell: oil prices are falling because OPEC can’t agree production cuts, steel faces a glut from overcapacity, and even the price of maize has fallen, presumably because of good harvests.
In local currencies this is not so much the case. Of course, the difference between prices in local currencies and prices in US dollars is reflected in the weakness of most currencies against the dollar in the foreign exchange markets. This tells us that whatever is happening in each individual commodity and in each individual currency the common factor is the US dollar.
The European Central Bank will decide early next year whether to follow the Federal Reserve, Bank of England and the Bank of Japan with quantitative easing or money creation to buy government bonds and other assets but will not buy gold, its president Mario Draghi said yesterday.
Speaking in the ECB’s new 1.3 billion euro headquarters, an imposing Frankfurt skyscraper designed to show the strength of the ‘single’ currency, Draghi threw down the gauntlet to Germany and signaled that he would not allow opposition from Germany or anyone else to stop the ECB’s QE.
It’s now been about a week after Black Friday, Small Business Saturday, and Cyber Monday.
During the four-day spree, about 133.7 million shoppers spent about $50.9 billion, according to AP and TIME magazine.
The psychological necessity to push, shove, and trample strangers while fighting for the right to purchase overpriced merchandize made in China has just begun. Thanksgiving—a day when Americans give thanks the Native Americans didn’t have immigration quotas—begins a 30-day frenzy to buy whatever corporate America is selling. It’s an American tradition to give presents to relatives, friends, business associates, and mistresses, all of whom will also give you presents, which will be opened, sometimes enjoyed, and often returned within a week for something better.
Michael A. Robinson writes: You’ve seen the headlines – and if you shopped online last weekend, you were a part of the story.
Storefront retail traffic was down around 11% on Black Friday, but online shopping was up more than 17%. In other words, we’ve changed the way we’ve shopped.
Thanksgiving Day was Target Corp. (NYSE: TGT)’s best online day ever, with sales rising 40% over the previous year. And so many smartphone-wielding customers headed to Best Buy Co. Inc. (NYSE: BBY) that its website suffered outages all through the long holiday weekend.
Abenomics Comes (Back) to Britain
We can easily argue that the UK has outdone Japan in financializing and destroying its economy using “pure Keynesian logic”. Its degutted empty-shell economy is fated to grow debt faster than the UK’s real economy, and then implode – well suited to its pseudo multicultural, pseudo meritocratic society. Keynes, who was English, bisexual and a paid-in member of its degenerate elite said that central bank QE and debt growth are a lovely idea, but expecting the real economy to react and respond only to money printing and a debt binge is like a man who wants to become fat thinking the best way is to buy a large sized belt for his trousers! Fatuous hope is all.
George Leong writes: While China is struggling with its gross domestic product (GDP) growth metrics, the country’s main stock market—the Shanghai Composite Index (SCI)—is easily outperforming the S&P 500 and NASDAQ.
China may be stalling, but the Chinese economy is still growing at a rate of more than seven percent—far better than the rest of the G8 countries. Now, of course, that’s if you believe the GDP reading that is put forth by the Chinese government; as with most data coming from China, it is up for debate whether it is real or fictitious.
A friend recently sent me a picture of a 1957 $1 silver certificate he found in his change while buying a cup of coffee. He’d been a coin collector as a kid and learned that his father carried nearly the same note in his wallet.
When I brought up Gresham’s law and the recent news that U.S. public and private debt had just breached the $18 trillion mark, it made very little impression, other than a brief pause in thought, though barely recognition.
In a blatant and massive market intervention, the price of gold was smashed on Friday. Right after the Comex opened on Friday morning 7,008 paper gold contracts representing 20 tonnes of gold were dumped in the New York Comex futures market at 8:50 a.m. EST. At 12:35 a.m. EST 10,324 contracts representing 30 tonnes of gold were dropped on the Comex futures market:
Another goon thug gratuitous murderer has been let off by a grand jury and a prosecutor. Read the condolences offered by NY mayor Bill de Blasio, officer Pantaleo and the Obama Puppet. They are so sorry about the collateral damage of protecting the public from criminals and terrorists. But our society would collapse if people are allowed to sell on the street untaxed individual cigarettes out of a pack. Without the death of innocents, none of us would be safe. Our safety depended on the NYPD murder of Eric Garner, a father of six who was a threat to no one.
Nicholas Migliaccio writes: It was sad at today’s Update Webinar to hear these esteemed TA market guys falling all over themselves, whistling past the graveyard so they didn’t have to call what the markets were doing as Rolling over in to a DownTrend.
OMG, did I let that Awful world DOWNTREND see daylight…….? Oh NO ! Sad, these guys are SO mainstream paradigm that you could hear them tremble. Damn shame, another place, another time, you’d pub up with them for a beer. Now however they are just apologists trying to save their salaries. Investors don’t buy their services when they are not outright bullish. I mean I cannot even get educated astute business people to execute a Sell STOP after their Limit gets violated, that is how brain-washed people are.
Jared Dillian writes: When I was in junior high, my friend Scott had this Billy Crystal tape that we passed back and forth to each other. I still like Billy Crystal, but let’s just say he was truly hilarious when I was 13 back in 1987.
He had this routine about old codgers who used to tell you how hard life was in the old days.
“We had no air…” he’d say, in an old man voice. “No food. We ate wool coats and we were happy.”
Shah Gilani writes: In Monday’s Wall Street Insights & Indictments column “What Happens When There’s Nowhere Left to Run,” I detailed the dangers posed by the scary move the U.S. Treasury bond market made back on Oct. 15.
My cautionary tale was totally justified.
Indeed, in yesterday’s Wall Street Journal, the lead article in the Global Finance portion of the “Money & Investing” section was “Watchdog Warns of Risk in Markets.”
Mr. Gold’s last paragraph is the tell on his bias, as he is unwilling or unable to conceal the contempt he has for people who were absolutely right for 10 years+ and are now suffering a bear market, both to their asset of choice and in sound monetary thinking.
“The vastly improved fiscal situation may last only a few years, but it’s a big plus for U.S. markets and the U.S. dollar — and another nail in the coffin for the gold bugs and doom-and-gloomers who can add one more item to the long list of things they got really, really wrong.”
Every 10 or 20 years a series of watershed events come together that change the face of the international energy picture.
The Saudi-led oil war is one of these pivotal situations.
And while others are fretting about what the OPEC production move means, I’m actually meeting with the guys who made the decision.
Dr. Steve Sjuggerud writes: Since June, the U.S. dollar has been unbeatable… It has beaten every major currency, except one.
Specifically, the U.S. dollar has outperformed 30 out of the 31 major world currencies in that time.
But what is the one currency that is stronger than the dollar? Which country is beating the U.S. now?
Stefan Gleason writes: Much to the chagrin of the financial elite, gold and silver are reentering the American consciousness and starting to shake the wing nutty image of their recent past. But it’s taken a global financial crisis to get the public’s attention – one that could wipe out our nation at almost any moment.
The U.S. government’s role in the economy is on a seemingly interminable upward trajectory. The government’s official debt balance that just crossed the $18 trillion mark (with additional unfunded liabilities estimated at more than $100 trillion). Half the population now lives in households that receive government payments.