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Ramblings

Discussion in 'Topical Discussions (In Depth)' started by Scorpio, Feb 5, 2014.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Big Draw Not Big Enough. The Energy Report 06/02/17
    Friday, June 02, 2017

    by Phil Flynn of The PRICE Futures Group


    [​IMG]


    The Energy Information Administration (EIA) failed to wow the crude oil market even after it reported the biggest crude oil drawdown of the year. The reason is technical weakness on the charts, coupled with the promise of more Libyan oil production and the fact that U.S. oil production increase tied the highest level since November of 2015. Not even President Trump’s withdrawal from the Paris Climate Accord could give the market the lift it needed. Yet despite the market reaction in the short term, are we putting too much faith in the promise of Libyan oil production and U.S. production and ignoring bullish data and growing demand record exports and refining runs.

    The drawdown was large by historical standards with U.S. crude supplies falling by 6.4 million barrels. The draw would have been even larger if it were not for the fact that they released 970,000 barrels from the Strategic Petroleum Reserve. Refining runs came in at a record as refiners ran 17.5 million barrels of crude operating at 95% of capacity. U.S. imports fell on average 309,000 barrels a day and we saw gasoline demand rise to a respectable 9.82 million barrels a day. That drove the supply of gasoline lower by 2.9 million barrels a day. Yet record demand for oil and record imports seemed to take a back seat to U.S. production that saw an increase to 9.34 million barrels a day from 9.32 million the week earlier.

    The market also fretted about the increase in Libyan oil output to 827,000 bpd, a three-year high according to the National Oil Corporation. This led to speculation that the combination of rising shale output and rising U.S. production would weaken the resolve of OPEC cartel members in adhering to production cuts. This skepticism is happening even though OPEC is mulling the possibility of a further 1-1.5 percent production cut if inventories remain high.

    The oil market also seemed to have a sell the fact effect after the U.S. withdrawal from the Paris Climate Change Accord even as President Trump seemed to layout a strong case as to why the deal was bad for the U.S. taxpayer and the U.S. economy. Trump said that, “compliance with the terms of the Paris Accord and the onerous energy restrictions it has placed on the United States could cost America as much as 2.7 million lost jobs by 2025, according to the National Economic Research Associates. This includes 440,000 fewer manufacturing jobs – not what we need, believe me, this is not what we need, including automobile jobs and the further decimation of vital American industries on which countless communities rely. They rely for so much and we would be giving them so little.”

    President Trump also questioned why the U.S. should kick in 3 billion dollars to support countries that will be allowed to increase carbon emissions while the U.S. cannot. Trump said that, “China will be allowed to build hundreds of additional coal plants. So, we can’t build the plants, but they can, according to this agreement. India will be allowed to double its coal production by 2020. Think of it. India can double its coal production. We’re supposed to get rid of ours. Even Europe is allowed to continue construction of coal plants.” In short, the agreement doesn’t eliminate coal jobs. It just transfers those jobs out of America and the United States and ships them to foreign countries. This agreement is less about the climate and more about other countries gaining a financial advantage over the United States. The rest of the world applauded when we signed the Paris Agreement. They went wild. They were so happy.”

    Well despite what the critics thought, we saw stocks surge after the pullout and oil fall. Cool temps causes a higher than expected 81 bcf increase into natural gas storage, but predictions of an active hurricane season and a return to warmer weather may start to support prices.

    Thanks,
    Phil Flynn
    Questions? Ask Phil Flynn today at 312-264-4364

    http://insidefutures.com/article/1967718/Big Draw Not Big Enough. The Energy Report 06/02/17.html
     
  2. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    interesting here, as the Sauds just received a deal on boat loads of new weapons of war, and they as well as Egypt jump in the pool with tramp.





    Terror Ties. The Energy Report 06/05/17

    Monday, June 05, 2017

    by Phil Flynn of The PRICE Futures Group


    [​IMG]


    Oil prices are getting a look at terror premium as 4 Arab Gulf States, led by Saudi Arabia, cut diplomatic ties with Qatar as another terror attack takes place on the streets of London. Terror is becoming a top issue around the globe as ISIS took responsibility for the slaughter on London Bridge.

    The Saudis said the action to break off relations was taken because of Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilizing the region” and it’s clear they are talking about not only rouge groups, but Iran backed groups like the Muslim Brotherhood, al-Qaida and ISIS. Bahrain, Egypt, and the United Arab Emirates joined the Saudi move that Qatar says is being taken because of “baseless accusations”. Qatar’s backing of Iran on many issues is causing strain in relations between OPEC members. For energy, the way this plays out, can have large impact on prices.

    While Qatar is not a major oil producer, they are one of the world’s largest providers of liquefied natural gas (LNG). Also, Qatar is a peninsular right in the Persian Gulf, the center of key oil transportation points. The country borders Saudi Arabia and the islands of Bahrain are just off its coast and any conflict in the region could disrupt the movement of supply.

    Saudi Arabia, United Arab Emirates, Bahrain, Egypt are withdrawing all diplomatic staff and are halting flights to Qatar’s capital Doha as tensions impact oil. As the news broke, oil rallied but sold off after it realized that there is not an imminent threat to supply of shipments. Still with tensions this hot, we must monitor the situation.

    The Wall Street Journal reports that, “Qatar is the world’s largest exporter of liquefied natural gas. In 2016 it shipped out around 77.2 million tons of the super-chilled gas, equivalent to about one-third of global supply, according to International Gas Union. Most of Qatar’s gas is located in its massive offshore North Field: Only Russia and Iran have more proven gas reserves, according to BP ’s Statistical Review of World Energy. To date, there is no indication that Qatar’s gas exports, which are mostly loaded up on ships before heading off around the globe, will be impacted by its row with neighboring Saudi Arabia. Major customers for Qatar’s gas are based in Asia—Japan sources around 15% of its gas from Qatar, while act that Qatar, a member of the Organization of the Petroleum Exporting Countries, isn’t actually a major petroleum producer. It accounts for around 2% of the cartel’s output, shifting 618,000 barrels a day in April. China and India are also big customers.”

    Oil may also have to get ready for another crude supply drawdown. OPEC cuts are starting to be felt and we should see crude supply fall by another 4 million barrels this week. Consider that over the last 2 months U.S. oil supply in storage (including the Strategic Petroleum Reserve) fell by a record 30 million barrels.

    Thanks,
    Phil Flynn
    Questions? Ask Phil Flynn today at 312-264-4364

    http://insidefutures.com/article/1969861/Terror Ties. The Energy Report 06/05/17.html
     
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  3. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    Very interested about the impacts this will have in regards to Syria and the proposed pipeline. I have a feeling that Trumps visit set some wheels in motion or at least steered them in a different direction.
     
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  4. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    agreed EA, this isn't coincidental

    lot of dough passes through Quatar as it gets 'laundered'
     
  5. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    gold continues to move towards 1300, while silver lags behind putting up a few tics

    showing 1295 and 1767 for now
     
  6. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    gold chart current 1.png
     
  7. solarion

    solarion Gold Member Gold Chaser

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    The dollar is turning to total shit even vs other shit. Down about 4.5% just in the past month. Meanwhile despite being 68% below its ATH silver has managed to pick up only about 7.5% vs the schiesse dollar during that same month. White copper is a thoroughly suppressed dog.

    [​IMG]
     
  8. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    looks as though gold still maintains some semblance of a monetary vehicle, while silver is left in the dust for magic currencies

    for those not watching, shitcoin was over 2800 this am
     
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  9. solarion

    solarion Gold Member Gold Chaser

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    Strange that wasn't the case in 1981 and 2011. Damn those Hunt brothers and their alleged market rigging! ...every 30 years.
     
  10. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    yet another comical disconnect this am,

    stocks down, bonds down, metals down, usd down

    while the only positive is oil

    besides shitcoin, ready to break $3K

    talk about a f'ked up world
     
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  11. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    According to BTC as a measure, the global economy has collapsed! LOL.
     
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  12. solarion

    solarion Gold Member Gold Chaser

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    There are no real markets...they're all rigged bs. Dollar strength strikes again!

    [​IMG]

    Down is up and up is down. In this context maybe bitcoin is telling us something... NAH...it's just a bubble! An eight year bubble, but a bubble. lol
     
  13. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Looks more like a crowded exit to me!

    images-29.jpeg
     
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  14. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Dennis Rodman Saves the World. The Energy Report 06/13/17
    Tuesday, June 13, 2017

    by Phil Flynn of The PRICE Futures Group

    [​IMG]

    In a world full of geo-political risk, can we take some comfort that at least one dangerous hotspot may cool down. Former basketball star Dennis Rodman is on his way to North Korea to open a dialogue with his buddy North Korean leader Kim Jong-Un. Maybe Dennis can explain to him that nuclear war may not be in his best interest. Oil traders can now rest easy. We’re all so relieved.

    Energy traders can also rest easy about the tension with Qatar because both Saudi Arabia and Qatar would not impact their oil production cuts in any way. In fact, the Saudis want to make it clear they are serious about doing whatever it takes to get the global oil market in balance. Reuters reported that Saudi officials now say they are making real cuts, including 300,000 bpd to Asia for July, although several Asian refiners said they were still receiving their full allocations.

    Reuters is also raising concerns about the U.S. shale producer that they say are vulnerable to falling prices as their oil hedges run out. “According to a Reuters analysis of hedging disclosures by the 30 largest U.S. shale firms, most stayed on the sidelines in the first three months of 2017, a stark contrast from a year ago when firms rushed to lock in prices, even though oil was trading $15 a barrel lower.” Compared with a year ago, the group is more exposed to falling oil prices, with one-fifth fewer barrels hedged, or the equivalent of 28 million barrels, and three times more barrels rolling off, or the equivalent of 38 million barrels. “In total, 18 companies reduced outstanding oil options, swaps or other derivatives positions by a total of 49 million barrels from the fourth quarter to the first quarter, the data shows. Another 10 companies increased their hedging positions by 91 million barrels; two others did not hedge at all.” So, if we do see prices start to fall, we will see the possibility of more bankruptcies and a slowdown in U.S. rig counts and ultimately U.S. production.

    Oil traders were emptying storage in recent months but the building contango is making them re-think that strategy. It seems the market is pricing in a tighter market in the future, encouraging storage of oil. Reuters take on this is it, “would undermine the impact of supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), which partly aimed to force traders holding oil in storage to sell to reduce bloated inventories that have sapped global prices”. Yet it may also cause a tightening of ready to use supply driving prices back up. Many people don’t remember, but in one of the biggest bull oil markets in history we were in a constant contango. We will have to see if the market takes this development as bullish or bearish.

    From a technical perspective oil is holding up well but we need to see some more excitement. Enthusiasm seems to have been put on hold mainly because we are waiting for news from the American Petroleum Institute, and The Energy Information Administration, The Federal Reserve, The International Energy Agency, well you get the idea. The market still is trying to come to grips with last week’s surprise increase in U.S. crude oil supply even though it was the first increase in 8 weeks. We will stay tuned for further developments.

    Thanks,
    Phil Flynn
    Questions? Ask Phil Flynn today at 312-264-4364

    http://insidefutures.com/article/1975357/Dennis Rodman Saves the World. The Energy Report 06/13/17.html
     
  15. BackwardsEngineeer

    BackwardsEngineeer If I weren't a snowflake, I'd have no luck at all Silver Miner

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    Exits are a myth.... like santa claus and the easter bunny..... We are all fully immersed and exposed until we aren't.
     
  16. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Reflexivity And Why The Fed Must Sell The Long End

    “ We’re in a depression. That is what the bond market is telling us.”

    The yield curve is flattening like a pancake. Tightening cycles tend to do that.

    [​IMG]

    [​IMG]

    Furthermore, the effective float of 10-year and longer U.S. notes and bonds is relatively small and greatly distorts the bond market signal. We have written about this several times.

    …how small the actual float of longer-term marketable U.S. Treasury securities is available to traders and investors. The data show the Fed owns about 35 percent of Treasury securities with maturities 10-years or longer. Note the data only include notes and bonds and excludes T-Bills.

    The Fed’s holdings combined with foreign ownership of longer maturities — more than 1-year — exceeds 80 percent of marketable Treasuries outstanding. The Fed combined with just foreign official holdings, mainly, foreign central banks, is 65 percent of maturities longer than 1-year. Thus, almost 2/3rds of tradeable Treasuries longer than 1-year are held by entities with no sensitivity to market forces. – GMM, March 2017

    Given the small float of tradeable Treasury notes and bonds, the market is subject to massive short squeezes if it gets too offside and rapid ramps if traders algos try and game duration.

    Information Positive Feedback Loop
    Many in the market, we fear, are being hoodwinked by the flattening yield curve, however. It’s purely the result of technicals and not economic fundamentals.

    Nevertheless, some still look to the badly distorted bond market as a signal of the health of the economy and act accordingly. Such as delaying capital spending; becoming more risk averse; and cutting back on consumption, for example.

    A flatter yeld curve also makes bank lending less profitable.

    This could thus lead to what George Soros calls “reflexivity” where the negative, but false, signal from the bond market actually causes an economic slowdown or leads to a recession. So much for efficient markets.

    Recall the famous line of one prominent market strategistduring the dark days of the great recession,

    “ We’re in a depression. That is what the bond market is telling us.”

    Or the ubiquitous, “what is the bond market telling us?” Come on, man!

    The Fed Needs To Start Selling Longer Dated Securities
    It would, therefore, behoove the Fed to sell some of its longer dated Treasury holdings to steepen the yield curve.

    The follwing table shows the Federal Reserve’s holdings of U.S. Treasury securites and the total Treasury outstandings for each year. This table does not include T-Bills.

    If the Fed were to just let its balance sheet “run off” — that is not rollover maturing notes and bonds — it would cause additional pressure on short-term interest rates even as policy rates are rising. It could also potentially invert or further disort the front-end of the yield curve and destablize the money markets.

    Looking at the data in 2018 and 2019 large maturities are coming due. Rolling a portion of these maturities and selling longer-dated securities would probably cause less disruption in the market and be a more optimal strategy of reducing the Fed balance sheet.

    [​IMG]

    Announcement Effect
    Just announcing the fact the Fed was contemplating such a strategy of unloading longer dated Treasuries first would cause the yield curve to steepen. The market would begin to front run the Fed. Bill Gross & Co. would kick into actionand “sell what the Fed wants to sell.”

    And because there are so relatively few Treasuries outstanding with maturities longer than 10-years, it is unlikely it would cause a bond market debacle, which many believe is coming. The total stock of Treasury securities with maturities longer than 10-years is smaller than the combined market capitalization of just Apple, Google, and Amazon, for example.

    If bonds become too oversold, the Fed could easily engineer a short squeeze to bring the yield curve back to where it desires.

    Recall, the Fed losing control of the yield curve prior to the financial crisis to foreign central banks recyling capital flows back into the U.S. is what Alan Greenspan singles out as the major cause of the housing bubble. The Fed moved the funds rate up 425 bps and the 10-year and mortgage rates barely budged.

    During the 2004-07 tightening cycle, the era of the Greenspan bond market conundrum, for example, the 10-year yield managed to rise only a maximum of 64 bps during the entire cycle from a beginning yield of 4.62 percent to a cycle high yield of 5.26 percent. This as Greenspan raised the fed funds rate by 4.25 percent, from 1.0 percent to 5.25 percent. – GMM, March 2017

    Risks
    The risk is that foreigners begin to sell. But where will they go?

    Spanish 10-years at 1.43 percent? German 10-year bunds at 0.266 percent? How about a 10-year Japanese JGB at 0.067 percent? In fact, low foreign yields and the ensuing portfolio effect is keeping the U.S. 10-year note well anchored below 2.60 percent and another factor distorting the yield curve.

    Credit and Equity Markets
    That is where there we could have some short-term problems and overshooting. But our sense, many are waiting to pounce on a sell-off in the spread and equity markets. Too many pensions are underfunded and too many seniors are yield strarved.

    Having some dry powder makes sense. It’s coming and you will have to act fast.

    Conclusion
    A sustained spike in inflation?

    Tilt! Game over, comrades.

    https://macromon.wordpress.com/2017/06/13/reflexivity-and-why-the-fed-must-sell-the-long-end/
     
  17. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    I just have this feeling they have a plan to trap everyone........ over time. <35 yo are broke. >36 - 60< yo stagnant wages, eaten by inflation & little conservative growth available so they are really going backwards. >60 - death are getting zero returns and helping out "the kids or grand kids"..... In another 25 years those broke 35 year olds will be 60 and still no pot to piss in. Is it housing they want to own the entire world so everyone pays rent to the land owners making them slaves....... is it the NWO where they only want 500 mil people so resources last forever? What is it they want because eventually it catches up with everyone....... even those that think they are well off.
     
  18. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Doug Kass is attributing the many, many market disconnects we have observed over the past decade to the use of algo's & A.I. ... Stating that the A.I. machines & their programming are apethetic to sound technical or fundamental analysis, further adding they seek a profit by whatever means are available, fundamentals & technicals are not even a consideration, only the ability to generate a profit & manage its dynamic activities at the lowest risk factors. Interestingly, reportedly once the A.I. machines are launched on-line & begin self learning, the programmers can no longer predict or control the decision making processes when the machines are active.

    The A.I. algo's add layer upon layer of data & info to learn..... in much the same manner that the 7 layer internet operates. And like the internet once the 4th layer becomes operational it becomes unintelligible & cannot be decoded, ergo in hu-man terms it becomes meta-physical to all but the most advanced machine language....

    If this is true, then hu-man market activities based upon sound fundamentals & technical trading has become nonsequitor... the machines seeking profits via arbitrage activities are in full control of pricing... traditional true price discovery is now a thing of the past....

    Like Something Out of 'The Twilight Zone,' This Market Is About the Machines


    http://realmoney.thestreet.com/arti...machines?cm_ven_int=homepage-latest-headlines

    "True, AI and the related "machine learning" developments at the leading edge of such technology do NOT simply duplicate human rules and logic. Instead, while they may perform simple repetitive correlations initially on data as humans currently formulate that data, the more advanced machines go on to program themselves at successive layers, where the data being analyzed and correlated is no longer what we think of as data. Rather, it is often data artifacts created by the first layers in a form that no human would ever consider or has ever seen. To put in a more street-level way, the first level creates ghosts and apparitions and shadows that the second layer treats as real data on which it assesses correlation and predictability in the service of some decision asked of it. AND ... a third and fourth and on and on are doing the same thing with output from each layer below it.

    The result of this procedure is striking and terrifying when the the leading experts in AI and machine learning are interviewed. They admit that they have no way of determining what rules AI and machine- learning powered machines are following in making their decisions AND we cannot even know what inputs are being used in making those decisions.

    Think about that. The creators have no knowledge of what their creations are thinking or what kind of inputs the machines are thinking about and how decisions about that are being made. The machines are inscrutable and, most terrifyingly important, UNPREDICTABLE.

    We are not telling these AIs how to make decisions. The machines are figuring out how to decide to "make a profit" on their own and subject to no enforceable constraint.

    The resulting risk of "flash crashes" -- to lump all sudden and unexpected behaviors into a catchphrase -- is unknowable but probably much greater than anyone even dreams. The machines have no fear of flash crashes or any other kind of crash. Such crashes might even serve their purpose of "making a profit."" -- Doug Kass, Seabreeze Partners Management

    TCP/IP Protocol Architecture
    TCP/IP protocols map to a four-layer conceptual model known as the DARPA model , named after the U.S. government agency that initially developed TCP/IP. The four layers of the DARPA model are: Application, Transport, Internet, and Network Interface. Each layer in the DARPA model corresponds to one or more layers of the seven-layer Open Systems Interconnection (OSI) model.

    https://technet.microsoft.com/en-us/library/cc958821.aspx

    Note: The 7 layer internet is rather perplexing, as the computer scientists & programmers have no idea of WHAT info or data constructs exactly exists at the 7th layer....
     
  19. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    Algos could be colluding with one another and driving markets higher just as JP Morgue and the others drove silver lower.
     
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  20. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Official warns Illinois finances in ‘massive crisis mode’

    “I don’t know what part of ‘We are in massive crisis mode’ the General Assembly and the governor don’t understand. This is not a false alarm,” said Mendoza, a Chicago Democrat. “The magic tricks run out after a while, and that’s where we’re at.”

    “Once the money’s gone, the money’s gone, and I can’t print it,” Mendoza said.

    https://apnews.com/9579fe24c9ab40e5...rns-Illinois-finances-in-'massive-crisis-mode'

    Their bonds will be junk rated by the end of summer???
     
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  21. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    agreed within reason,

    the machines can still be manipulated with volume, which then 'forces' the machines play, maybe even exaggerating the whole event.

    which of course means that this known fact re AI can be used to advantage, and great advantage at that

    a human overseeing the action will want confirm or? whereas the machines will just act on price movement.
     
  22. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  23. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    don't know how many have been watching, but the bond bulls are going nutz even though stocks have been setting record highs,

    speaks to the massive amounts of fiat sitting around everywhere,

    1.png
     
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  24. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Just as I speculated, bond market just shrugged its shoulders at Janet & the FOMC's recent rate change....

    Note the RSI is carefully managed too.... Wallstreet is enjoying "having their cake & eating it too." I suspect the smart ones are loading up their get away cars at this point, while Bonds are screaming deflation & depression...

    “Stock prices have reached what looks like a permanently high plateau”. -- Irving Fischer, Sept. 3, 1929
     
  25. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  26. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  27. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Kroger stock price finally moved lower once all the corp stock buy-backs & financial games ended.

    A fair PE considering their market would be somewhere around 9 or 10. IMO the stock is headed to $15.00 or less due to sector competition & market crowding, growth & income limitations.

    sc.png
     
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  28. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    very quietly, the USD has been sinking as the world economies pick up.
    weak durable goods yesterday,
    and yet, metals are not taking advantage of this weakness

    1.png
     
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  29. solarion

    solarion Gold Member Gold Chaser

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    Nice. The crap dollar is down 1.07% just today and the metals are snoozing as usual. Of course they got an early morning paper dump yesterday to prepare them for the dollar weakness today.

    Meanwhile bitcoin reversed on a dime and is now kicking ass and taking names...again.

    [​IMG]

    Nothing like a free market to show you what a rigged market looks like.

    So the garbage dollar is down 4.6% just since April 7 and metals have done...what since then?

    LOL Ag is actually down 7.3% since April 7 against the dollar...while the dollar fell 4.6% vs other fiat paper...particularly the failing Euro.

    Au is down .58% since April 7 vs the "strong" US dollar.

    Rigged markets are rigged.
     
    Last edited: Jun 27, 2017
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  30. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    That Old Mario Magic. The Energy Report 06/27/17
    Tuesday, June 27, 2017

    by Phil Flynn of The PRICE Futures Group

    [​IMG]

    Oil prices are getting a boost from that old Mario magic as the European Central Bank head tried to explain everything from oil to the Phillips Curve. His upbeat comments about the economic recovery in the EU and his explanation why energy prices are a drag on inflation, sent the Euro currency soaring and the dollar falling. That drop in the dollar gave oil a boost which is still trying to bottom at a key support level after having one of the worst down months in recent memory. Draghi was upbeat but warned that the weakness in oil and other commodities might be because of the lingering effects of the economic slowdown. It is one reason that despite the economic recovery, inflation has remained low and while it could be just a bit of oversupply, the lack of inflation that is puzzling central bankers around the globe.

    But the Central banker speech fun is just beginning as Bank of England Governor Mark Carney is set to speak about the bank’s Financial Stability Report at 6 a.m. Eastern Time. In London, Federal Reserve Chairwoman Janet Yellen will speak at 1 p.m. Eastern time according to Market Watch. Based on the post Draghi Market move, we must pay attention as these speeches could move us today.

    Oil may also see some short covering ahead of tonight’s American Petroleum Institute report that should show big drops in supply due to Tropical Storm Cindy. At The same time, the price crash that we have seen is causing talk of investment in shale projects, a sign that efficiencies in production of shale may be going backward.

    Dow Jones reported efficiency gains being made in the West Texas oil patch look to be slowing down. Oil output per rig in the Permian Basin, a prolific drilling field, has dropped steadily since last August, according to estimates kept by the U.S. Energy Information Administration. Production there is expected to be 602 barrels a day per rig in July, down 14.5% from August 2016. “We expect productivity to ultimately decline 30% over 2017,” analysts at Baird said.

    RBOB futures look like they may have bottomed as well. We hit key support and we are oversold and low pump prices should inspire extra demand.

    “Phys.0rg” says it solved the mystery as to why all the oil from the Deep-water Horizon disappeared. Chemicals and microbes! That’s right! They report that a team, led by Berkeley Lab microbial ecologist Gary Andersen, is the first to simulate the conditions that occurred in the aftermath of the deepwater spill. Their study, “Simulation of Deepwater Horizon oil plume reveals substrate specialization within a complex community of hydrocarbon-degraders,” was just published in the Proceedings of the National Academy of Sciences. In other words, they found out why the oil spill was not the disaster that everyone thought it was going to be.

    “This oil spill was the largest in history, with the release of 4.1 million barrels of crude oil as well as large amounts of natural gas from a mile below the surface of the ocean. After the initial explosion and uncontained release of oil, researchers observed a phenomenon that had not been seen before: More than 40 percent of the oil, combined with an introduced chemical dispersant, was retained in a plume nearly 100 miles long at this great depth. But the oil went away because of what they say is a newly discovered bacterium!

    DNA sequencing of its genome identified what was a new bacterium and mechanism for degrading oil. They gave this newly discovered bacterium the tentative name of “Bermanella macondoprimitus” based on its relatedness to other deep-sea microbes and the location where it was discovered. “Our study demonstrated the importance of using dispersants in producing neutrally buoyant, tiny oil droplets, which kept much of the oil from reaching the ocean surface,” Andersen said. “Naturally occurring microbes at this depth are highly specialized in growing by using specific components of the oil for their food source. So, the oil droplets provided a large surface area for the microbes to chew up the oil. “We now have the capability to identify the specific organisms that would naturally degrade the oil if spills occurred in other regions and to calculate the rates of the oil degradation to figure out how long it would take to consume the spilled oil at depth,” Andersen said.

    Natural gas is back in rally mode as prediction of a larger heat dome could make its way over most of America. DT WxRisk.com says that the, “12z regular European model has jumped on board with the GFS model and now it does move the heat ridge with an embedded dome from the Rockies into the heart as central Plains and the Midwest by D9-10. This clearly shows the heat ridge and in place over Missouri Illinois Arkansas Indiana and Western Kentucky. If this solution is correct and that is a big IF…it would clearly shifted jet stream well to the north shut off the precipitation for most of the Midwest and send temperatures close to 100° especially west of Mississippi River. Again let me point out that this is significant change from the early Monday morning European model. Still the fact that this solution now agrees with the operational GFS model does give some support the idea that the possibility exists for the heat dome over the Rockies and the western Plains COULD come east at some point in the middle of July. For how long and what sort a temperatures it’s hard to say at this time. But this is an interesting trend.

    What! Another fat finger trade, this time in gold. The gold drop in the middle of the height shook out some longs but the outlook for gold is improving.

    Thanks,
    Phil Flynn
    Questions? Ask Phil Flynn today at 312-264-4364

    http://insidefutures.com/article/1985373/That Old Mario Magic. The Energy Report 06/27/17.html
     
  31. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    on bonds, you can see that big leg down yesterday, + the 2nd is further weakness this am,

    prices down, yields or rates up

    1.png
     
  32. solarion

    solarion Gold Member Gold Chaser

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    Pretty kewl. Stocks are down, bonds are down(yields up), the dollar is down, and the metals are down. Nothing like a free market. Any guesses as to where funds are flowing just now?

    [​IMG]
     
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  33. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Looks like a temporary disinflationary wave is upon us... a.k.a. the Market Makers are rebalancing their positions in support of the Feds policy making activities.

    Nothing to see here.... !!! JMO
     
  34. solarion

    solarion Gold Member Gold Chaser

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    A targeted temporary deflationary wave? I mean the dollar has been steadily declining for 83 days, the stock market has been booming during that time, bonds have been holding up fine until very recently, PMs have been getting killed the entirety of that time while most other commodities appear unaffected. How does one target specific commodities? ...aside from the obvious counterfeiting naked short selling scam?

    I get that the fed stooges want to appear hawkish and have been cranking up the rates within their control since Trump won the election, but that should be strengthening the dollar, killing bond prices, and deflating bubbly tech stocks that are at insane PE ratios. Instead the dollar is now at a 9 month low, the stock & bond markets are near ATHs and metals have been getting run down almost all year.

    ...and it still leaves me wondering where funds are flowing if not into one of these sectors. I mean days in which everything was red used to be extremely rare, but they seem to be happening with some regularity of late.
     
    Last edited: Jun 29, 2017
  35. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  36. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    that is the point, what was normal no longer is,

    as you state, normal market relationships have changed, at least for the time being

    which goes back to our original points that the sheer volume of fiat being created worldwide is causing all manner of disconnects
     
  37. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    end of month and end of quarter pumpers started yesterday afternoon, stemming a rout, and are back on duty this am big time to pretty everything up prior to end of business today.
     
  38. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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    Is This Why the Fed is Raising Rates???

    As the Fed is in the midst of a rate hike cycle, it seems important to remember why this cycle is like no previous rate hike cycle. The mechanics of this hiking cycle are completely unique and experimental...thus the outcome is far more of an unknown than "normal".

    Why? In a typical cycle, the Fed would sell a relatively small portion of its assets...er, balance sheet (typically short duration bills and notes) to banks. This would withdraw some of banks liquid funds (replacing them with less liquid assets) and create "tightness". This tightness would push overnight lending rates higher and the daisy chain of rising rates would work its way through from the shortest eventually all the way to the 30yr Treasury bonds.
    However, this time, nothing like that is happening. This is because the Fed sold all its short term notes/bills (in Operation Twist) and bought longer duration MBS (mortgage backed securities) and longer duration Treasuries in Quantitative Easing to the tune of $4.5 trillion. Further, since the Fed bought most of these assets from large banks, these banks held much of the proceeds from these sales at the FRB (Federal Reserve Bank). For the Fed to perform typical rate hikes, it would need to remove most of the $2.1 trillion banks are now sitting on in excess reserves @ the FRB...likely creating a crisis in the process. Conversely, if the Fed can't contain the $2.1 trillion at the FRB, and the reserves are leveraged into the market...stand back in awe of the mother of all bubbles.

    Continued:

    https://econimica.blogspot.bg/2017/06/is-this-why-fed-is-raising-rates.html?m=1
     
  39. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    No one should ever place wagers on my hunches but I predict a beat down Wednesday.
     
  40. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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