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Indianapolis Colts vs. Cincinnati Bengals: Start Time, TV Channels, Live Stream Info For Last Preseason Matchup

September 3, 2015 by · Leave a Comment 

The recent and unfortunate injury to Indianapolis Colts defensive tackle Art Jones can serve as an example for and against the NFL preseason. Jones went down with a left ankle injury in last week’s matchup with St. Louis, and now surgery appears likely. But for Indianapolis, the timing of the injury comes when they still have a litany of options to replace Jones.

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Refugee Crisis 2015: In Jordan, More Than 100,000 Syrian Students Means Double Shifts For Some Jordanian Schools

September 3, 2015 by · Leave a Comment 

It was back to school this week for students in the Middle Eastern country of Jordan, in a scenario that served as yet another reminder of how the Syrian refugee crisis has left few countries untouched. Syrian students headed back to school alongside their Jordanian peers, with some schools adopting new schedules or creating enormous class sizes to accommodate them, according to a senior government official.

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UK ‘Refugees Welcome’ Movement: Brits Start Campaign To Win Over Prime Minister David Cameron

September 3, 2015 by · Leave a Comment 

The Independent, one of Britain’s most widely read newspapers, started an online campaign this week to encourage Prime Minister David Cameron and the U.K. government to invite more refugees to settle in the country. From the thousands arriving daily in eastern and southern Europe this summer, most fleeing violence and persecution in their home countries, Cameron has volunteered to take a limited number, and the “Refugees Welcome” movement aims for him to accept more.

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Labor Day Easy Recipes 2015: How To Make Ribs, Sides, Dessert And Cocktails For A Perfect Holiday

September 3, 2015 by · Leave a Comment 

Labor Day is a time to relax, stuff your gullet and be thankful that you have worker rights in the United States. Emphasis on the relaxing and eating, of course.

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One-And-Done For The Fed?

September 3, 2015 by · Leave a Comment 

This post One-And-Done For The Fed? appeared first on Daily Reckoning.

And now… Today’s Penning for your thoughts…

Good day, and a tub thumpin’ Thursday to you!

The last “full-day” of trading this week, as the markets will thin out, big time, tomorrow afternoon, as traders attempt to get out of town, and beat the rush. I thought my little conversation between trade and wife the other day was quite funny, but then most of the time I wonder if I’m writing to amuse myself! HA!

Well, I truly wish I could tell you something different today about the currency trading. For the most part the dollar has the conn, but there are some currencies carving out gains vs. the dollar, so it’s not an all-out assault by the green/peachback.

I was going through the stories that were posted on the Bloomberg this morning, and one caught my eye, as the headline read: “September or not, Market says Fed’s One-and-Done until Late 2016”.  And I thought to myself, “Hmmm, why go through the effort of hiking rates once now, and then wait a year to revisit that hike?” That seems pretty silly to me.

But then it would be exactly what I told you it would be, when I told you IF the Fed decided to hike rates this year, the rate hike would be small, and they would only be doing it to save face with the markets, to whom they’ve promised a rate hike would be around the next corner for over a year now.

So, that’s the Big News this morning.  That and the fact that the Swedish krona is the best performing currency overnight!  The poor beaten and beleaguered krona gets to have a day in the sun, because the Swedish Central Bank (Riksbank) left rates unchanged yesterday, which I’ll remind you is a negative -.35%.

The Riksbank told the markets after the rate announcement that their decision was not a reaction to the volatility in the Global Markets, but instead, they patted themselves on the back saying that their loose money policy is having the desired effect on the economy that they thought it would.  So, bask, krona, it’s your day, and tomorrow, you will be back on the selling blocks, because who really wants a currency that charges you interest to hold?

The biggest positive mover this week has been the Chinese renminbi.  But there will be no more movement in the renminbi this week, because the Chinese are on holiday for the rest of the week!  And I have to say that I think that this shutdown for the holiday came at a very good time, because things were beginning to get really confusing with what was going on with the currency, the policy changes to the currency, and everything else.

Speaking of China… In the past month I’ve highlighted the fact that China has lowered their U.S. Treasury Holdings.

Well, according to an article on Reuters, it’s not just China doing the unloading of U.S. Treasuries holdings. Let’s listen in:

As of last week, foreign central banks had reduced their holdings of agency debt and mortgage-backed securities at the U.S. central bank for six straight weeks to $285.21 billion, the lowest level since early May, according to the Fed data released last week. Last week’s decline was $10 billion, the steepest drop since June 2012.

Even the Fed reports the lower Treasury holdings for foreigners in their reports. I would think they might want to hide something like that, because just knowing that Holdings are being unloaded, could cause yields to rise.

And one very important point here: the U.S. uses Treasury sales to finance our debt.  and this plays into the possibility that yields might have to rise, for if the debt is not getting financed, the one thing that can be done is to raise yields, to make them more attractive to foreign investors.

Of course getting a double bang for their buck would be if the dollar were weaker. Cheap, cheap.

And to go even further with China on my mind, as opposed to Georgia on my mind.  Well, remember when I told you that not only had China’s exports fallen but so too had South Korea’s?

Well, I found this on www.businessinsider.com  and just had to cut and paste it here for illustration, that these countries are sounding the warning horn on Global Growth, is Janet Yellen listening?

China -7.6%
Europe -7.7%
Japan -20.9%
ASEAN -3%
Latin America -19.3%

These numbers were taken for the article from Bloomberg.

Well, the European Central Bank (ECB) is meeting as I write this morning. They normally end their meeting and head to the press conference right about the time I’m hitting “send”, so I have to go out on a limb normally, and say what I think the ECB and its President, Mario Draghi, will say and do.

Well, I don’t think the ECB will do anything this morning, but I do believe that Draghi, is going to dig his heels in on how slow it’s taking for inflation to rise in the Eurozone. Patience, Mario, patience, and remember to gather the gold coins as you go along. HA!

I guess that last line is only going to register with about half of the readers. Sorry, but it was an opportunity to throw in a funny and I went for it!

That’s the problem with Central Banks these days. They have no patience. They implement a monetary policy and they thing it will change things immediately.

Hey! Memo to Central Bankers: economies how large or small they are not like Ferraris and can turn the corner in a heartbeat, they are more like a large cruise ship, and it takes a while for the ship to make a turn like that!

But who do I think I am telling these gurus of monetary policy about how economies work? They know it all! Don’t you forget that for one minute!  OK. I’m about to fall out of my chair laughing here, so I had better go on to something else!

Getting back to the ECB and other things Eurozone related this morning…

The Eurozone composite PMI (manufacturing index) printed this morning, and actually was revised higher from the flash estimates, that had already showed the economy continuing to improve. So, for the record, the Eurozone PMI for August was 54.3, vs, 53.9 in July. The 54.3 reading is the highest this data set has seen a few years. In fact, in August 2012 the index stood at 46.1, so that has been a nice climb higher, slow, and steady, eh?

Recall that yesterday, I showed you how the U.S. manufacturing index was falling.

Now, of course the main mover of the Eurozone PMI was Germany, which is the largest economy of the Eurozone. And once again, brings me to dreamland, this is where I dream that I can buy just Germany. But then I’m awakened into reality! UGH!

The Polish Central Bank left rates unchanged yesterday, which was expected, as there’s really not much going on here. The Economy is soft, but not in recession, and their internal interest rate is relatively interesting at 1.5%… I’m still leaving a light on for when Poland decides to join the euro.

I think after the Greek excitement earlier this summer, that the Polish leaders would be prudent to let enough water under the bridge before talking about joining the euro again. Not that the Polish leaders want to “fool” the people, but rather, wait for the pain to be forgotten!

And imagine this: the British pound sterling is getting sold because — drum roll please — the markets are coming to the realization that the hopes of a rate hike are fading in the wind.

Oh, really? You mean there is not going to be a rate hike, like Bank of England Gov. Carney promised there would be?  I chuckle at the thought that the markets believed Carney and his bag of promises.

Well, gold is down $7 this morning. The thought here is that the Jobs Jamboree tomorrow is going to yield a jobs report that the Fed likes, and pushes them toward a rate hike.

Every day there’s something different with this “rate hike talk”.  One day, the markets are convinced there’s no way the Fed will hike rates, and the next day, they reverse their thoughts.

The U.S. Data Cupboard had another mixed bag-o-data yesterday. This economy is proving to be so uneven, I can’t believe the powers that be don’t see it for what it is.  For instance, Factory Orders failed miserably to meet expectations of a 0.9% gain, and only booked a gain of 0.4%, and when you take out Transportation the number fell to -0.6%.

But on the other side of the coin, Mortgage Applications were up 11.3% in August. As I’ve said before, better to get them in now, and not worry about whether the Fed raises rates or not. And the ADP Employment Change, which is supposed to be a good indication of what the BLS Jobs report will print on Friday, saw that it too couldn’t meet expectations of 200,000, instead printing at 190,000, with the previous month getting revised down by 8,000, no big shakes.

I’ve been doing a ton of reading and it appears that August isn’t a good month for job creation, with the last 2 years prior to this year, with jobs prints that failed to meet expectations and printed at 180,000 in ’14, and 193,000 in ’13.  The expectations for those years were 213,000 and 256,000.

Well, the consensus forecast for August 2015, is for 218,000 jobs to have been created in August.

Well, did you know that after Friday’s Jobs Jamboree, there will be another boondoggle beginning? This one is called G-20. I normally say G-20, Schmee-20m, as rarely is it that we see something that moves the markets come out of this meeting, but this one is going to start off with a bang.

Japan has requested that China’s economy be put on the agenda.  And the U.S. President’s administration has urged China to carefully explain its policy changes to financial markets and to shift it economic focus toward consumer spending so that its economy can keep growing.  So, there you go!  I hope China tells them to mind their own business, take care of their own houses, and sit back and watch China recover from a recession, something that Japan, and the U.S. have failed to be able to do!

Yesterday’s 5 Minute Forecast, which I’ve told you many times before is a required daily read for me, had a comment from a reader, who must have been in the audience of the Vancouver Investment Symposium a few years ago, for he said  what I told the audience that year! Only this time, he was talking about how everyone was up in arms about China devaluing their currency and that the U.S. had done this before to the dollar.

Here’s what I said in Vancouver a few years ago. Actually, July 2009!

The U.S. realized a dollar devaluation of 41% in 1934, when the Gov’t raised the price of Gold from $20.67 to $35 an ounce, through a series of Gold-related actions.

Do you believe in co-inkee-dinks? I’m not sure I do. So therefore the only reasonable explanation to this is that he was there, taking notes, like a good attendee, especially when I was talking!  HAHA!

And just like a roller coaster ride, the price of oil is back up this morning. Up, down, and all around for the bubbling crude, Black Gold, Texas Tea. Then the next thing you know, Old Jed’s a millionaire. What a great/funny old show!

For What It’s Worth. Well, talk about wishy-washy. I’ll not get all mean about this, but I had to laugh when I saw this on Reuters yesterday. And the good thing is that I had forgotten about it, until going through Ed Steer’s letter this morning, and he pointed it out as a critical read, so if Ed thinks it’s critical, then so do I!

The link for the whole article can be found here:

Bond guru Bill Gross, who has long called for the Federal Reserve to raise interest rates, said on Wednesday that U.S. central bankers may have missed their window of opportunity to hike rates earlier this year and doing so now could create “self-inflicted” instability.

In his September Investment Outlook report, Gross wrote that his concept of a neutral policy rate closer to a nominal 2 percent “now cannot be approached without spooking markets further and creating self-inflicted financial instability.”

The neutral rate is the point at which the rate is neither stimulative nor contractionary.
The Fed seems intent on raising the federal funds rate at its policy meeting this month if only to prove that it can begin the journey to normalization, said Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund.

“They should, but their September meeting language must be so careful,” that “one and done” is an increasing possibility, Gross said. The “one and done” approach represents the Fed raising rates once and not again, at least for the next six months, Gross said

Chuck again. So, now you see what I mean when I say this is “wishy-washy”. But he’s Bill Gross, the bond king!  And I guess that gives him the freedom to go from saying they should hike rates to saying they shouldn’t hike rates!

But I think he nailed it when he said this:

The Fed is beginning to recognize that 6 years of zero bound interest rates have negative influences on the real economy – it destroys historical business models essential to capitalism such as pension funds, insurance companies, and the willingness to save money itself.

A decline in saving would lead to other problems like decreases in investment and long-term productivity.

But, I think he forgot to mention that carrying a HUGE Debt does the same things.

That’s it for today. I hope you have a tub thumpin’ Thursday!

Regards,

Chuck Butler
for The Daily Reckoning

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The post One-And-Done For The Fed? appeared first on Daily Reckoning.

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Federal Reserve Beige Book Reveals Businesses Are Experiencing ‘Modest’ Effects From China’s Slowdown

September 2, 2015 by · Leave a Comment 

In the midst of the recent stock market turmoil and concerns of a slowing global economy, the U.S. Federal Reserve’s Beige Book revealed something telling Wednesday. China, the world’s second-largest economy, was mentioned eight times in the report, more than the previous five Beige Books combined. 

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North Korea, Russia News Update: Students To Learn About ‘Friendship’ With Kim Jong Un’s DPRK

September 2, 2015 by · Leave a Comment 

A school in the far eastern Russian city of Khabarovsk is scheduled to teach a new course focused on helping students deepen the “time-tested friendship” between Russia and North Korea, according to a local Gubernia news portal. Portraits of Russian President Vladimir Putin and North Korean leader Kim Jong Un occupy the school’s walls, emphasizing the desired friendship promoted by the course.

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Notre Dame Fighting Irish vs. Texas Longhorns 2015: Betting Odds, Prediction, Preview For College Football Opener

September 2, 2015 by · Leave a Comment 

After Notre Dame saw their College Football Playoff hopes dashed when they lost four of their last five regular season games in 2014, head coach Brian Kelly turned to quarterback Malik Zaire to lead the Fighting Irish to a victory in the Music City Bowl. Zaire gets the nod again in 2015, as No. 11 Notre Dame begins their quest for a national title starting with the season opener against unranked Texas at Notre Dame Stadium.

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Josh Duggar’s Reputed Mistress Had Pregnancy Scare After Unprotected Sex During Ashley Madison Cheating Scandal: Report

September 2, 2015 by · Leave a Comment 

A woman who had unprotected sex with former “19 Kids and Counting” star Josh Duggar said she was afraid she was pregnant with his child, the unnamed mistress told In Touch Weekly report Wednesday.

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The Bank of China coughs, and global markets shake with volatility

September 1, 2015 by · Leave a Comment 

By Michael Trinkle, ForexTraders

Investors are jittery. Analysts are jittery. The Press is even jittery. By the looks of market volatility over the past few days, these three groups must have thought that the “Big One” had finally arrived, but, alas, the Bank of China jerked the global economic chain, resulting in a shockwave that was felt in most every market across the planet. This jerk was not the “Big One”. Markets absorbed the shock, recovered, and have moved on. Such is the level of fear that pervades the minds of the investor collective.

Should we be concerned? Yes, we need to understand that market participants are in fear that calamity will strike at any moment. Analysts estimate that there is an $11 trillion carry-trade over-hang just waiting to unwind and cause havoc in everyone’s portfolio. The question is not “If” but “When” it will happen. Market forces have been manipulated by central banks in every region such that a coiled spring of sorts exists that is tightening with each passing day that Zero-Interest Rate Policies (ZIRP) stay in effect. Stock markets have benefited, but equity values are inflated and need to deflate at some point.

When markets opened this past Monday, the S&P 500 Index took a nosedive at the bell. This fall, when combined with previous losses for the index, constituted a combined 10% fall from grace, the definition of a market correction. But, before the day was out, buyers rushed in to grab up supposed bargains, and here we are again, waiting for the highly anticipated correction to take place. What does the future hold for stocks? This week’s award for the “Best Chart” goes to the firm of Political Calculations:

This company publishes an S&P 500 earnings forecast each quarter, based on the guidance given for each entity in the index. Aside from hysteria and free money from various QE programs, earnings growth is the key variable that drives valuations of stock prices. If you accept the premise of the chart, then it predicts that an earnings’ recession, a period where earnings decline over more than two consecutive quarters, will extend into the fourth quarter of this year. Is the so-called day of reckoning on the near-term horizon? The red-shaded area does look a bit foreboding, doesn’t it?

If this was not the Big One, then why did markets behave so strangely?

Volatility was the name of the game during this quasi-corrective move, especially in the foreign exchange markets. If there is one thing that analysts and central bankers agree on, then it is that heavy turbulence in the forex world will engulf market participants when the actual balloon goes up. There are many reasons for this statement, and we will get to that discussion later, but, for the moment, there were no fundamental causes in the form of economic releases that justified this recent bout with craziness. Yes, Chinese officials have been proactive in their efforts to right their rocking economic ship, but these antics were not something new.

Consider the following economic facts:

  • China’s economy is falling, hopefully, to a soft landing at 7% GDP growth;
  • China’s stock market bubble has burst and values are correcting;
  • The Bank of China devalued the national currency to boost demand;
  • Commodities continue to flounder without increasing demand from China;
  • Commodity currencies (AUD, NZD, and CAN) will weaken as a result;
  • The Fed and the BoE are the only two central banks that are considering rate hikes, either this or early next year. Most others are considering cuts;
  • Europe and Japan are broadening their quantitative easing efforts;
  • Economic indicators in the U.S. market continue to move forward at a gradual pace, including monthly job growth figures in excess of 200,000 for the last two years, but inflation has not gotten out of control, as many predicted.

The simple truth is that these facts were known a week ago, and not one of them has changed materially. We are so used to reading about contagion in the EU that many investors have assumed that the current malaise in China will spread and cause an avalanche of problems down the road. The fact is, however, that China has been pulling back for several years, ever since the Great Recession put a damper on Western demand for their goods. What we are witnessing is a Chinese learning curve on how and when to intervene with policy changes to manage their domestic economy. To their credit, when the market slide began on Monday, the Bank of China did reduce interest rates, a move designed to calm the market environment. It appears to have worked.

This week’s market reaction may be a preview of things to come?

The nature of this week’s market behavior was not according to textbook. Many analysts were confused. Panic in the streets is supposed to cause capital to take flight to safe havens in times like these, but the U.S. Dollar weakened on most fronts. Since the brief stock market meltdown did not cause a massive shift in capital flows, one has to examine the marginal aspects of the current global investment milieu in order to make sense of what just transpired.

Marginal aspects are those that have been taken most recently on an incremental basis by global investors. These funds may be betting on a quick return at high risk, but, in a pinch, as in the commotion over the past week, investors tend to unwind those bets that have the least chance for a return worth waiting for. As you might conclude, these marginal bets were made in anticipation of the Fed raising interest rates in early September. Surveys hinted at more than a 50% chance, but the market had only factored in a 25% chance, so why not put any excess cash lying around behind the USD?

The situation still gets a little murky when trying to apply this principle to carry-trade positions. The general consensus is that both the Euro and the Yen have been used as the funding currency for many of these marginal trades. At the first sign of panic, these positions were the first to unwind, thereby repatriating funds back to the homeland and putting increasing demand on their respective currencies. In other words, if excess capital in Japan and Europe had been bet on the USD appreciating in early September, these positions were the first to be unwound when alerts went flying about.

Is this logic borne out in the recent “EUR/USD” pricing behavior?

The following daily chart tells the story:

Since last April, the Euro has been range bound between 1.08 and 1.15. The pricing activity, however, has resembled a downward channel with a slight downward slope, an acknowledgement that the ECB is presently printing money with its form of quantitative easing. Expanding the money supply implies a weakening currency, all according to plan to boost export trade and improve the fortunes of its most southerly member states that happen to depend on tourism and more local pursuits for economic prosperity. The sudden spike up from the central Bollinger line was a surprise to all.

The rapidity of the spike was even more puzzling. Fear in Asia would normally have driven funds into the British Pound, the Swiss Franc, U.S. Treasuries, or precious metals, another USD-based market sector. Whenever you see a currency pair rise this swiftly without any apparent fundamental economic reason, then you should be salivating in anticipation of a good fading run on the way down. In this regard the Euro did not fail its followers. It came down like a rock, as did the Pound and the Yen.

What could cause such an abnormal response to fear in the streets? The prevailing answer among analysts is that many USD-based carry trades were suddenly unwound. These bets were marginal at best, offered only the smallest chance of a monetary reward, and were the easiest to sell off in order to meet margin calls elsewhere. In addition, long equity positions in Europe and Japan more than likely included currency hedges that also had to be unwound, creating additional demand for the home currency. Lastly, a few analysts point to declining petrodollars as another cause. When barrels of oil are moving off the shelf, the Saudis and others have excess Dollars to invest. The fall in commodity prices has dried up this demand for USD, as well as for the Euro.

Be sure to ensconce this litany of events in your brain cells for later down the road when true panic grips the market. As for now, volatility has crested. Calmness has returned, and indicators, like the Double Stochastic above, still signal when reversals have taken place. As shown in this diagram, the head fake rise was temporary by nature. It soon reversed. When a real stampede for the exit materializes, you will see countries and companies rush to recover Dollar reserves to match their Dollar obligations. This action will be the real stampede that creates enormous demand for U.S. Treasuries.

Concluding Remarks

When should we start to get worried? Caution is still advised. For the moment, most experts expect the Euro to continue on its downward path, perhaps, through the Kumo Cloud to 1.10 and even further to test support at 1.08. No one is speaking parity with the greenback at this juncture. It may test a few obvious Fib lines of support, but, without favorable economic data to brag about, there is no free air for the Euro balloon. Foreign exchange reserve managers have rebalanced over time, so do not expect any pent up demand from that quarter.

For the time being, expect to see a plethora of articles about a top forming in the S&P 500 Index. Most of these will point to one or two dozen indicators that scream that stocks are way overvalued, but the authors will shy away from timelines or whether we will see a 10% correction or something along the lines of a 20% fall that would signal the end to the third longest Bull market in modern times. If you are convinced that doom is in the horizon over the next year, then you might want to reconsider risk allocations in your portfolio. Advisors in this area suggest buying large-cap domestic stocks (50%), investment grade bonds (25%), and cash (25%).

If you are active in the forex market, then get ready. Your time is coming!

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