Gold Miners’ Q3’17 Fundamentals

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold miners’ stocks have spent months adrift, cast off in the long shadow of the Trumphoria stock-market rally. This vexing consolidation has left a wasteland of popular bearishness. But once a quarter earnings season arrives, bright fundamental sunlight dispelling the obscuring sentiment fogs. The major gold miners’ just-reported Q3’17 results prove this sector remains strong fundamentally, and super-undervalued.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. Companies trading in the States are required to file 10-Qs with the US Securities and Exchange Commission by 45 calendar days after quarter-ends. Canadian companies have similar requirements. In other countries with half-year reporting, many companies still partially report quarterly.

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Chicago Pawns A Crown Jewel

By John Rubino – Re-Blogged From Dollar Collapse

A new bond issue from Chicago is rated AAA. That’s great because it means the city’s finances are on the mend, right?

Nope, just the opposite. Here’s the story:

Bondholders fret as alchemy turns Chicago’s junk to gold

(Bloomberg) — Chicago’s public pension debt is $36 billion and growing, it’s facing $550 million in budget deficits over the next three years and this summer the state had to bail out a school system that was flirting with insolvency.

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Gold Investment Stalled

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Gold has largely been drifting sideways for the better part of a couple months now, sapping enthusiasm. Gold investment demand has stalled due to extreme stock-market euphoria. Investors aren’t interested in alternative investments led by gold when stocks seemingly do nothing but rally indefinitely. But once stock-market volatility inevitably returns, so will gold investment demand which fuels major gold uplegs.

Like nearly everything else in the global markets, gold prices are heavily dependent on investment capital flows. When investors are buying gold in a meaningful way, demand exceeds supply which drives gold’s price higher. When they’re materially selling, supply trumps demand thus gold’s price naturally retreats. The past couple months have been stuck in the middle, with gold investment flows neutral on balance.

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What A Pre-Crash Market Looks Like

By Michael T Snyder – Re-Blogged From http://www.Silver-Phoenix500.com

The only other times in our history when stock prices have been this high relative to earnings, a horrifying stock market crash has always followed.  Will things be different for us this time?  We shall see, but without a doubt this is what a pre-crash market looks like.  This current bubble has been based on irrational euphoria that has been fueled by relentless central bank intervention/a>, but now global central banks are removing the artificial life support in unison.  Meanwhile, the real economy continues to stumble along very unevenly.  This is the longest that the U.S. has ever gone without a year in which the economy grew by at least 3 percent, and many believe that the next recession is very close.  Stock prices cannot stay completely disconnected from economic reality forever, and once the bubble bursts the pain is going to be unlike anything that we have ever seen before.

If you think that these ridiculously absurd stock prices are sustainable, there is something that I would like for you to consider.  The only times in our history when the cyclically-adjusted return on stocks has been lower, a nightmarish stock market crash happened soon thereafter

The Nobel-Laureate, Robert Shiller, developed the cyclically-adjusted price/earnings ratio, the so-called CAPE, to assess whether stocks are likely to be over- or under-valued. It is possible to invert this measure to obtain a cyclically-adjusted earnings yield which allows one to measure prospective real returns. If one does this, the answer for the US is that the cyclically-adjusted return is now down to 3.4 percent. The only times it has been still lower were in 1929 and between 1997 and 2001, the two biggest stock market bubbles since 1880. We know now what happened then. Is it going to be different this time?

Since the market bottomed out in early 2009, the S&P 500 has been on a historic run.  If this rally had been based on a booming economy that would be one thing, but the truth is that the U.S. economy has not seen 3 percent yearly growth since the middle of the Bush administration.  Instead, this insane bubble has been almost entirely fueled by central bank manipulation, and now that manipulation is being dramatically scaled back..

And the guys on Wall Street know what is coming.  For example, Joe Zidle says that this bull market is now in “the ninth inning”

Joe Zidle, of Richard Bernstein Advisors, is arguing that the bull market has entered the bottom of the ninth inning.

“This is a late-cycle environment,” Zidle said on CNBC’s “Futures Now” recently.

“In innings terms, they’re not time dependent. An inning could be shorter or they could be longer. It just really depends,” the strategist said.

This bubble has lasted for much longer than it ever should have, and everyone understands that a day of reckoning is coming.

In fact, earlier today I came across an article on Zero Hedge that contained an absolutely remarkable quote from Eric Peters…

We are investing as if 1987 will happen tomorrow, because it will,” said the CIO. “But we need to be long, or we’ll be out of business,” he explained, under pressure to perform. “So we construct option trades that are binary bets.” Which pay X profit if stocks rally, and cost Y if markets fall. No more and no less.

What you do not want is a portfolio whose losses multiply depending on the severity of a decline.” That’s what most people have today. “At the last stage of the cycle, you want lots of binary bets. Many small wins. Before the big loss.”

Are we at the start or the end of the ‘Don’t know what I’m buying’ cycle?” asked the same CIO. “No one knows.” But we’re definitely within it.

When their complex swaps drop 40%, and prime brokers demand more margin, investors will cry ‘It’s not possible!’ But anything is possible.” The prime brokers will hang up and stop them out.

In case you don’t remember, in 1987 we witnessed the largest one day percentage decline in U.S. stock market history.

When it finally happens, millions upon millions of ordinary Americans will be completely shocked, but most insiders know that the other shoe is going to drop at some point.

In particular, watch financial stock prices very closely.  Last month, Richard Bove issued a chilling warning about bank stocks…

One of Wall Street’s most vocal bank analysts is troubled by the rally in financials.

The Vertical Group’s Richard Bove warns that the overall market is just as dangerous as the late 1990s, and he cites momentum — not fundamentals — as what’s driving bank stocks to all-time highs.

If we don’t get some event in the economy or in politics or in somewhere that is going to create more loan volume and better margins for the banks, then yes, they would come crashing down,” Bove said Monday on CNBC’s “Trading Nation.” “I think that the risk in these stocks is very high at the present time.”

It isn’t going to take much to set off an unstoppable chain of events.  Our financial markets are even more vulnerable than they were in 2008, and the right trigger could unleash a crisis unlike anything we have ever seen in modern American history.

Unfortunately, most Americans keep getting fooled by the artificial boom and bust cycles that the central banks create.  Right now most people seem to have been lulled into a false sense of security, and they truly believe that everything is going to be okay.

But every time before when the market has looked like this a crash has always followed, and this time will be no exception.

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Hypocrisy Most Foul. . .

By Michael Ballanger – Re-Blogged From http://www.Gold-Eagle.com

As you all know by now, I have absolutely zero knowledge of anything related to the “blockchain” technology, which translates into “I don’t own Bitcoin and would not touch HIVE Blockchain Technologies Ltd. (HIVE:TSX.V; PRELF:OTC) with a barge pole.” That also means that I am constantly being reminded, primarily by those considerably younger than me, that geriatric anchoring is costing me (and my readers) a great deal of money by avoiding the space which, as you can see from the chart below, has been absolutely true.

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Gold Stocks’ Winter Rally

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold miners’ stocks have largely ground sideways this year, consolidating their massive 2016 gains. That lackluster trading action, along with vexing underperformance relative to gold, has left gold stocks deeply out of favor. But these uninspiring technicals and resulting bearish sentiment should soon shift. The gold stocks are just now entering their strongest seasonal rally of the year, the super-bullish winter rally.

Gold-stock performance is highly seasonal, which certainly sounds odd. The gold miners produce and sell their metal at relatively-constant rates year-round, so the temporal journey through calendar months should be irrelevant. Based on these miners’ revenues, there’s little reason investors should favor them more at certain times of the year than others. Yet history proves that’s exactly what happens in this sector.

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Bad News Banksters Double Cross Their Customers

Re-Blogged From http://www.MoneyMetals.com

Crooked bankers are all over the headlines again.

The world’s largest metals hedge fund, Red Kite Management, Ltd., is suing Barclays for rigging copper prices. Federal prosecutors launched an investigation of Wells Fargo bankers working on its foreign exchange desk Friday. And on October 23rd, a jury in New York convicted an HSBC trader of fraud.

The HSBC trader, Mark Johnson, said he “thought we got away with it” to his coworkers after cheating their client in a massive foreign exchange transaction. But he was wrong. The jury found him guilty for his involvement in a 2011 exchange in which the Cairn Energy Plc converted $3.5 billion dollars to British pounds.

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