Dennis Gartman Says Gold is Bad, Then Good, Then Bad Again

WTF is this shit?

Dennis took to the airwaves today of offer his expertise on gold. He told us it basically sucked, really, really bad, over every time frame for 5 years. He furthered that it should continue to get hammered into clown dust because the dollar was in the 4th inning of a 9 inning ballgame (what the fuck does that even mean? Is there like 50 mins left in the game?).

Then he mixed it up a bit and straight mind fucked all watchers of the teevee by suggesting gold had been a great buy in euro terms or even better in yen. Does this motherfucker know he’s on U.S. tele?

He concluded that everyone should own a little gold, in all portfolios, effectively defecating on all of his previous comments regarding gold.

Chinese CPI just came out and it was below expectations. For an economy allegedly growing at 6.9%, to have a CPI below 1.5% sounds freaking ridiculous.

I bet if real accountants looked into China, they’d find the GDP growth to be more in line with America, around 2%.

The consumer-price index rose 1.3 percent in October from a year earlier, according to the National Bureau of Statistics. That compared with a 1.5 percent median estimate in a Bloomberg survey and 1.6 percent in September. The producer-price index fell 5.9 percent, extending its streak of negative readings to 44 months.

The lingering deflation risks, along with declines in trade, flag the need for additional stimulus as inflation remains about half the government’s target pace. The People’s Bank of China — which has cut interest rates six times in the past year — is seeking to stabilize the economy without fueling a renewed surge in debt.

“The risk of deflation has accentuated,” said Liu Li-Gang, the chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “This requires the PBOC to engage in more aggressive policy easing.”

Food prices rose 1.9 percent from a year earlier, from 2.7 percent in September. Non food prices climbed 0.9 percent. Prices of consumer goods increased 1 percent, while services increased 1.9 percent, the data showed.

The inflation reading follows a tepid trade report that suggested the world’s second-biggest economy isn’t likely to get a near-term boost from global demand.

Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, while weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8 percent, leaving a record trade surplus of $61.6 billion.

Muted inflation gives the PBOC additional room for further easing. The central bank will maintain stable monetary policy and create a neutral monetary and financial environment for economic restructuring, according to the third-quarter Monetary Policy Implementation Report it released Friday. The PBOC said the economy faces downward pressure and inflation is likely to be low.

China’s economy grew 6.9 percent in the three months through September from a year earlier, the slowest quarterly increase since the start of 2009. For the full year, growth is set to be the slowest since 1990.

Top leaders have signaled that they won’t tolerate a sharp slowdown in coming years. President Xi Jinping said last week that average annual growth should be no less than 6.5 percent in the next five years to realize the nation’s goal to double 2010 GDP and per capita income by 2020.

“Declining prices, a heavy debt burden and still high interest rates will likely weigh on corporate balance sheets, undermining their debt servicing capacity and investment demand, and worsening banks’ asset quality,” UBS Group AG analysts led by Wang Tao wrote in a report ahead of the data. “The negative feedback loop needs to be broken with more serious restructuring, helped by further monetary easing.”

Pair the woefully weak Chinese economy with ours and one has to wonder if the Fed is purposely trying to cause an equity rout. I can see no other rational explanation for hiking interest rates at a time devoid of any semblance of inflation.

Gundlach is like the 3x inverse Rick Santelli, giving mad shade to Grandma Yellen’s naive Fed. The clam-fuckers at the Fed are either the stupidest motherfuckers to have ever walked the planet. Or (and this is my working theory), they are purposely trying to bankrupt CHK.

“I have a hard time believing a Fed tightening will help the economy,” Gundlach, whose Los Angeles-based company manages about $80 billion, said Monday on a conference call with investors. “I think volatility will increase and the economy will weaken.”

Do any of you people actually believe Fed tightening will help the economy? Being honest with yourselves, you know damned well it’s going to expedite liquidations in the 100 billion plus distressed oil and gas debt and ruin so many people who invest in stocks; this shit is going to get comical–like 2008 funny.

One of my partners on the site hates when I cuss and rant on the headline title, as he likes to show friends and family the site. iBankCoin isn’t a family site. This isn’t Disneyworld. Speaking of which, one of my favorite attractions at Disney is the Tower of Terror, broken elevator pin action for the entire family to enjoy.

My sister is absolutely mortified of elevators. She actually opts out and climbs up stairs, like an ape. I’d love to get her into that Tower of Terror ride, so that I could video record her terror.

“The Fly” isn’t scared of anything, not even ruinous stock prices. I’m down 1.3% today, led by the fuckheads at COST. Retail is truly shit.

Do you what’s not shit?

Biotech.

Who could’ve figured that out, eh? The market rips through the fucking floor boards and the best performing sector, aside from gold, is biotech. If you tried to create a more diabolical tape, you could not. This is the perfect trap.

Pray pardon, keep sending money into your 401k plans, so that your local Blackrock fund managers can spread that shit, like creamed cheese, across the capital landscape.

LISTEN TO ME. The Option Addict is holding a 5 day clinic for those who missed out on the iBankCoin Conference. Actually, conference attendees are more than welcomed to join too, since lots of new material will be touched upon, as the markets have been making some big moves since then. The iBC Online conference will take place from November 16th to the 20th, each session lasting anywhere from 60-90 mins, all live.

ACT NOW

NOTE: Members of any iBC service will receive a 25% rebate.

Filthy, Asian, bugs are to blame.

Just when you thought it was safe to head on over to the store for a box of orange’d juice, all of the fucking groves get destroyed and prices spike.

When will the inflation subside?

“The market is scrambling to find a new equilibrium price to reflect what’s happening on the ground,” Joe Nikruto, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “You may see speculators entering this market in anticipation that prices are going to go much higher.”

Futures have soared 35 percent from a three-year low of $1.0345 a pound on Sept. 29 as investors weighed slowed demand against declining output. Brazil is the world’s top orange-juice producer, followed by Florida.

No Solution

There’s no solution the citrus disease, which has caused billions of dollars in losses across Florida since 2005. By some estimates, “the industry needs to put more than 20 million trees in the ground over the next 10 years to support existing infrastructure and get production back to where it was” before greening, Michael W. Sparks, chief executive officer of Florida Citrus Mutual, the state’s biggest producer group, said in an e-mail on Friday.

The most “pessimistic” scenario in a recent study by the Florida Department of Citrus has the crop falling to 27 million boxes by 2026. A box weighs 90 pounds or 41 kilograms.

What else could be added? NO SOLUTION. Kiss your orange sliced dessert, at your local chinese restaurant, goodbye.

This is lost puppy, starving in the woods, sad.

Year-end compensation will be lower by 5 percent to 10 percent broadly throughout the financial services industry, the report said on Monday, with fixed-income traders experiencing an even larger drop as bond trading revenue continues to be weak.
Payouts to investment bankers who advise companies on mergers could rise 15 percent to 20 percent as the global market for dealmaking remains strong.

Compensation for debt traders, meanwhile, could fall as much as 20 percent from a year ago as doubts about Federal Reserve interest rate policy and China’s economic slowdown have negatively affected banks’ bottom lines.

Morgan Stanley said last quarter that bond trading revenue had fallen 42 percent, while Goldman Sachs Group Inc reported a 33 percent decline.

Investment bankers who help companies underwrite initial public offerings may experience a pay decline of 5 percent to 15 percent. Many companies have decided to stay private for longer amid choppy markets.

Banks are setting aside less money for pay. Goldman said it had earmarked 16 percent less money for compensation in the third quarter than it had for the same period last year. JPMorgan Chase & Co also said it had set aside 13 percent less money for compensation.

One could argue this is Fred Wilson’s fault too. Had Fred and his San Fransican friends not been so damn greedy, hoarding all of the cool, kick ass, tech companies in private holdings, our beloved Wall Street bankers could be making enough money to treat Tiny Tim and maybe even buy a nice turkey for the holidays.

Instead, Tiny “fucking” Tim is hobbling about the room, on the verge of death. Bankers are sad, without cocaine. All the while, Fred wilson and his San Franciscan friends get fatter (gluten free range, organically) and richer.

What is this world coming to?

MNK is now down 17% after Citron fucking Tweeted that they had more downside than VRX, at these levels.

Pray tell, how does one have more downside than “the next Enron?”

It must be good to be a Citron gangster.

Citron’s tweet regarding MNK has erased more than $1.5 bill in market capitaliation in 5 minutes, now off by 22%.

You’ve got to be fucking kidding me. It’s like the market has an author and his name is Stephen King, the horror novel guy. If you told me a few weeks ago that stocks would knife lower by 200+ and biotech would be up, I’d think you were nuts. That’s exactly what’s transpiring today, the lowest probability trade is the imperial one. This is Murphy’s law 101: whatever could go wrong, will go wrong.

How does one prepare for a series of never-ending black swan events, low probability strategies that randomly changes directions for the ultimate “fuck you market”?

You don’t. Trading this mess requires space magic, Goldman Sachs branded crystal balls. If you’ve relegated your investments for long term holds, then this is simply vaudeville for you– a good, wretched show.

Eighty percent of stocks are lower today. What else more is there to say? I knew when I saw SHAK reverse Friday’s gains that all would be lost. It’s not so much that SHAK controls the world, in that, SHAK is a litmus test for risk. Despite a multitude of reasons to buy stocks, people are still panicked out over the specter of higher interest rates.

We can go through the motions and discuss how fucking idiotic the Fed is for wanting to raise rates, just so they could lower them later–“when they really need to.” But this whole cat and mouse game with the shorts is quixotic. There isn’t a debate here, or a back and forth about who’s winning.

Look, if you haven’t been long FANG (Facebook, Amazon, Netflix, Google), or something similar to them, you’ve been shining shoes for the past year, a giant sucker in a sea of suckers.

That’s the bad news.

The good news is Option Addict has caved into popular demand and will be doing a clinic for those who missed the iBC Conference. It will last for several days, one hour per day, touching on all of the salient points that he made then with some updates to reflect what the market has done since then. This is a great opportunity for those who couldn’t come to the event. Don’t miss it.

Goldman is out with a research note, of the crystal ball varietal–predicting US corporations will spend upwards of $2 trillion next year. They even bothered to tell us exactly how it might play out.

BEHOLD.

1. Capital expenditure, research and development
Goldman is calling for $650 billion in capex and $256 billion in R&D spending, reflecting growth of 1 percent and 5 percent respectively. The firm points out that the energy sector accounts for 30 percent of S&P 500 capex, which means “lower for longer” oil prices are weighing on capital spending. “Our forecast of a roughly $50 per barrel Brent crude price in 2016 and recently slashed spending budgets by both Chevron and Exxon suggest a further decline of 20 percent in energy capex during 2016,” the team says in the note. R&D is a different story, however, with energy only accounting for 2 percent of total S&P 500 R&D spending.

2. Mergers and acquisitions
After a blockbuster 2015, Goldman expects cash M&A spending to come in at $300 billion in 2016, that’s an 8 percent increase but still lower than previous growth rates. “The pace of growth in S&P 500 cash M&A spending will decelerate in 2016 relative to the 50 percent surge experienced in 2015. Although two months of the year still remain, cash M&A has totaled $191 billion year-to-date, higher than the 2014 full-year total of $185 billion. Healthcare accounted for almost 50 percent of cash deal activity this year. We expect cash M&A during the second half will decelerate considerably relative to activity in the first half,” Kostin and team say.

3. Buybacks, buybacks and more buybacks
Goldman says companies will spend $608 billion on buybacks in 2016 even in the face of increasing valuations. “Despite weak activity during the first half of 2015, buyback activity will remain robust. Following 9 percent growth in 2014 and an estimated 10 percent growth in 2015, we expect S&P 500 gross buybacks will rise by another 7 percent to $608 billion in 2016. More than 80 percent of S&P 500 firms engage in share repurchases, roughly double the number of firms buying back stock 20 years ago.”

4. Dividends for everyone
Led by financials and tech, Goldman expects dividends to increase 7 percent to $432 billion. “Consensus forecasts imply that the financials sector will grow dividends by 10 percent in 2016, the highest growth rate of any sector, while energy dividends are expected to come under pressure. Slowing global growth has weighed on long-term dividend prospects,” the note says.
Goldman has some recommendations for investors seeking to capitalize on its spending predictions. Even though the bank has vocally opposed hefty buybacks, the analysts recommend investors buy firms that have high total cash returns relative to those investing in growth, as the former group is typically rewarded by markets.

There’s no debating: US corporations are flush with cash and have no idea how to spend it. Typically, they cavort on the golf course and smoke cigars with their mates, then order their underlings to buy back billions of dollars in share repurchases, whilst “cutting the fat” by firing people and reducing “overhead”.

Good shit.