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Jun 15, 2015

CMI Spot Prices as of Close of Trading in New York and an Opinion on Dow Potential Drop of 4,000 Points



Spot Prices as of close of trading in New York

Monday, June 15, 2015


Gold

Today Change Week Ago Month Ago Year Ago
$1,187.10 +$6.40 $1,174.80 $1,226.80 $1,275.55

Silver

Today Change Week Ago Month Ago Year Ago
$16.12 +$0.26 $15.99 $17.59 $19.75

Platinum

Today Change Week Ago Month Ago Year Ago
$1,090.90 -$7.00 $1,103.10 $1,171.80 $1,441.80

Palladium

Today Change Week Ago Month Ago Year Ago
$736.70 -$3.75 $747.40 $796.50 $816.80

Gold/Silver Ratio

73.64
________________________________________________________________________________
 

Opinion: Get ready for a 4,000-point Dow drop 


Mark D. Cook
June 10, 2015
www.marketwatch.com

Slumping bond market is ominous for U.S. stocks



Shutterstock.com

The stock market has an empirical rule: interest rates lead stocks. And the current interest rate environment is pointing to a massive decline for the U.S. market.

Consider: The Federal Reserve has taken rates to the lowest level in more than a generation. This has energized stock prices. The Fed has persisted in its directive to “stay the course,” having made no raises in the discount rate for more than seven years. Such monetary policy has no precedent; this is the longest stretch of accommodation by the Fed in the post-World War II era.

But there’s Fed-induced rates, and “actual” rates. The most widely followed Treasury markets are the longer-term 10-year and 30-year  bond markets. These two markets are highly sensitive to longer-term actual interest-rate pressures. For example, banks use longer-term Treasurys to make decisions on pegging personal loan rates to clients for mortgages, businesses, and other uses. The commercial and industrial areas of the economy also are susceptible to the actual cost of money.

Are there parallels to this current market environment? Yes — 1987.

The summer that year began with a slow, methodical rise in actual rates. Yet the Fed did not raise the discount rate, even though actual rates suggested otherwise. The fall of 1987 arrived with the stock market having hit an all-time high in late August, unfazed by this unsettled condition.

As it happened, the Federal Reserve was literally forced to raise interest rates. Policymakers were behind the curve severely, just as the Fed is now. The 1987 rising-rate action caused stock prices to tumble more than 30% within two months, including a sharp 20% selloff in October — still among the Dow Jones Industrial Average’s DJIA, -0.78%  worst one-day percentage declines ever.

These warning signs are again visible. The first week of June recorded the highest interest rates since December. Bond prices are down about 12% since the end of January.

The stock market, meanwhile, follows the bond market’s direction — except by a much wider margin. A multiple of 2.0 is conservative. A 2x multiplier figured against the recent 12% plus loss in bonds prices would generate a 24% decline in stock prices.
At current levels, such a slide would equate to a loss of about 500 points on the S&P 500 and a Dow pullback of close to 4,300 points.

So pay attention to rising actual rates. The “actual” bond market is already into a bear market, with declining tops and lower lows since the end of January. The stock market is vulnerable here. The first week of June saw interest rates spike, with bond prices losing 2.5% of their value. This is comparable to around a 7 1/2% loss in stock prices in one week.
  The pressures are increasing exponentially since the decline in bond prices has not resulted in a stock market slide. And the greater the pressure, the greater and quicker will be the downward move.

[See also: A brick wall waiting to collapse; Dow Transports see “death cross”; The stock market is managing the Fed]

DealBook P.M. Edition - June 15, 2015: Top Story: Ex-A.I.G. Chief Wins Bailout Suit, but Gets No Damages



MONDAY, JUNE 15, 2015
TOP STORY
Maurice R. Greenberg, the former chief executive of American International Group, argued that shareholders were shortchanged by the government's $182 billion bailout.
Ex-A.I.G. Chief Wins Bailout Suit, but Gets No Damages Maurice Greenberg, the former chief of A.I.G., had been seeking nearly $40 billion, contending that the government overstepped its bounds in its 2008 bailout.

Wall Street at Close Report by MarketWatch on June 15, 2015: U.S. stocks slump, dragged down by Greece worries

marketwatch.com

U.S. stocks slump, dragged down by Greece worries

Anora Mahmudova, Barbara Kollmeyer
 
U.S. stocks finished broadly lower Monday, beginning the week on a downbeat note Monday after the collapse of weekend talks over Greece’s bailout plan and disappointing economic data.
The S&P 500 SPX, -0.46% declined 9.68 points, or 0.5%, to close at 2,084.43. The Dow Jones Industrial Average DJIA, -0.60%  had dropped nearly 200 points in early trade, but pared losses to close 107.67 points lower, a loss of 0.6%, at 17,791.17. The Nasdaq Composite COMP, -0.42%  fell 21.13` points, or 0.4%, to 5,029.97.
A New York-area manufacturing survey came in well below expectations, with the index dropping to a negative 2.0 in June, while economists polled by MarketWatch expected a reading of 5.7. Industrial production in May also dipped.
Earlier, stock futures were keeping pace with European equities, which fell sharply as talks between Greece and its international creditors collapsed over the weekend, reigniting fears that Greece may default on its debts and potentially exit the eurozone.
“Rallies have been relatively short-lived, however, pullbacks have also held above technical levels. This suggests that it’s too early to jump the gun in deciding which way the market goes next,” said Frank Cappelleri, executive director of Institutional Sales and Trading at Instinet.
“If small and midcap stocks rally to new highs, large-caps will follow. But in the meantime, sideways trade is the most likely outcome for weeks to come,” he added.
Phil Orlando, chief equity strategist at Federated Investors, highlighted three major issues that potentially can result in a market correction of 5%-10% over the summer.
“But in the near term, markets are very much driven by news in Greece, the Federal Reserve policy setting meeting this week and potential collapse of Iranian nuclear negotiations. These three issues together could result in an air pocket this summer,” Orlando warned.
Read: Fed meeting should leave a Final Four of dates for rate hike
Saudi Arabia opens stock market to foreigners
The oil-rich Muslim kingdom allows global investors to buy shares listed on its stock exchange for the first time.
In economic data, following disappointing Empire State manufacturing index, more negative news came in the form of industrial production, which fell a seasonally adjusted 0.2% in May.
On the bright side, the National Association of Home Builders (NAHB) home builders’ index, a gauge of confidence among U.S. home builders, for June rose five points to 59, representing a nine-month high.
Need to know: Why buying expensive stocks has been a winning strategy
Stocks to watch: Standard Pacific Corp. SPF, +5.62%  and Ryland Group Inc. RYL, +5.21%  announced a $5.2 billion merger deal to create the fourth-largest U.S. home builder. Standard rose 5.6%.
After briefly being halted, shares of Cigna Corp. CI, +11.74% soared Monday as The Wall Street Journal reported that Anthem Inc. ANTM, +2.33%  made a bid to purchase the rival insurer. Anthem shares also traded higher.
Read more about today’s notable movers in Movers & Shakers column.
Greece-worry redux: Losses for the Stoxx Europe 600 SXXP, -1.63% weighed on stock futures. European stocks fell more than 1%, as Greece’s Athens Composite GD, -4.68%  sank 5% and the yield on Greece’s 10-year bond hit 12%, a level not seen since April.
Read: Greece bonds, stocks collapsing as the market re-panics
The euro EURUSD, -0.0443%  briefly dipped below $1.12 in Asian trading, but turned higher versus the dollar in later activity. Oil prices CLN5, +0.18%  trimmed losses as the dollar weakened, while gold prices GCN5, -0.05%  posted moderate gains.
In Asia, stocks pulled back across the board, with the Shanghai Composite Index SHCOMP, -2.00%  dropping 2%. The Nikkei 225 index NIK, -0.09%  finished flat.

Koos Jansen: Rectification of Chinese gold trade rules: GATA | THE GATA DISPATCH - June 15, 2015.

Koos Jansen: Rectification of Chinese gold trade rules

Submitted by cpowell on  Monday, June 15, 2015 1:09p ET Monday, June 15, 2015

Gold researcher and GATA consultant Koos Jansen today clarifies two rules about gold trading in China. Customers of the Shanghai Gold Exchange, he writes, can use domestic renminbi to buy contracts on the international gold exchange in Shanghai. And non-standard gold bars made in China do not have to be sold through the exchange, just standard bars. His report is headlined "Rectification of Chinese Gold Trade Rules" and it's posted at Bullion Star here:

https://www.bullionstar.com/blogs/koos-jansen/rectification-on-chinese-g...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

SEC Press Release - June 15, 2015: Swiss Trader to Pay $2.8 Million to Settle Insider Trading Charges.

 SEC Seal
06/15/2015 12:50 PM EDT

The Securities and Exchange Commission today announced that a Swiss trader has agreed to pay more than $2.8 million to settle charges that he traded on nonpublic information ahead of a Florida-based biometrics company’s acquisition by Apple Inc.
A SEC investigation found that Helmut Anscheringer purchased stock and call options in AuthenTec Inc. upon learning from a longtime friend related to an AuthenTec executive that Apple proposed to buy the company, which provided fingerprint sensors and software for use in electronic devices.  The call options accounted for nearly all of the series volume on the days he purchased them.  Just days later, AuthenTec publicly announced that it had agreed to become a wholly-owned subsidiary of Apple for $355 million in cash.  The positive news led to the stock price closing approximately 60 percent higher than the previous day.  Through his unlawful trading, Anscheringer garnered more than $1.8 million in illicit profits.
“Anscheringer attempted to profit by freely trading on inside information,” said Glenn Gordon, Associate Director of the SEC’s Miami Regional Office.  “Foreign traders in U.S. stocks are not exempt from SEC scrutiny as we traced the misconduct back to Anscheringer when investigating these significant purchases in a trading account belonging to an entity in the British Virgin Islands for which he was listed as the beneficiary.”
The SEC’s order instituting a settled administrative proceeding finds that Anscheringer, who lives in Basel, Switzerland, violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  Without admitting or denying the findings, Anscheringer agreed to pay disgorgement of $1,820,024, prejudgment interest of $121,732, and a penalty of $910,012 for a total of $2,851,768.  He must cease and desist from committing or causing any violations and any future violations of the antifraud provisions of the federal securities laws.
The SEC’s continuing investigation is being conducted by Sunny H. Kim and Kathleen E. Strandell in the Miami Regional Office with assistance from Mathew Wong of the Market Abuse Unit in the New York Regional Office.  The case is being supervised by Jason R. Berkowitz and the litigation is being led by Robert K. Levenson.  The SEC appreciates the assistance of the Swiss Financial Market Supervisory Authority, Options Regulatory Surveillance Authority, and Financial Industry Regulatory Authority.

National FTC Consumer Protection Week - June 15, 2015: Email from OPM – is it the real deal?.

National Consumer Protection Week Blog Updates


Lisa Weintraub Schifferle
Attorney, Division of Consumer & Business Education, FTC

You just got an email saying your information was exposed in the OPM data breach. Wondering whether the email is the real deal or not? Here are a few things to look for:
Read more >

European Markets at Close Report by MarketWatch on June 15, 2015: European stocks slammed by Greek deal impasse



marketwatch.com

European stocks slammed by Greek deal impasse

Sara Sjolin, Carla Mozee
 
European stock markets slumped Monday as Greek default fears increased after talks between Athens and its lenders broke down on Sunday night.
Greece’s Athex Composite Index GD, -4.68%  tanked 4.7% to end at 738.25, the lowest close since April 23, according to FactSet data.
The Stoxx Europe 600 index SXXP, -1.63%  erased 1.6% to 383.02, building on a 0.9% decline Friday. Greek stocks were among the worst performers, with Alpha Bank AE ALPHA, -9.03%   at the bottom of the index as shares slid 9%, and National Bank of Greece SA ETE, -5.71%  losing 5.7%.
It is all about the Greeks: Monday’s drubbing came after European officials over the weekend dismissed the Greek government’s latest reform proposals as “vague and repetitive,” raising concerns that the two sides will struggle to reach a bailout deal before the debt-laden country runs out of cash.
The Eurogroup of finance ministers will meet on Thursday and analysts note this will almost be the last chance to strike a deal before Greece needs to repay 1.6 billion euros ($1.80 billion) to the International Monetary Fund on June 30. The country’s current bailout program also expires on that day. Read: Greece bonds, stocks collapsing as the market panics again.
“Deadlines are never cast in stone in Europe. But […] it will get more difficult to strike a deal and to get it ratified across Europe if Greece does not get real this week,” said Holger Schmieding, chief economist at Berenberg, in a note.
“In Greece, we have to watch the risk of accelerating deposit flight as well as the domestic political situation. Does political Athens realize how serious the situation is? After all some 70-75% of Greeks want to stay in the euro according to opinion polls,” he added.
Greek Prime Minister Alexis Tsipras called an emergency government meeting for Monday afternoon local time, according to media reports.
Bonds in Greece were also hit hard Monday trade, with the yield on two-year government paper surging 3.22 percentage points to 28.26%, according to electronic trading platform Tradeweb. The yield on 10-year bonds jumped 85 basis points to 12.32%, the first close above 12% since late April.
The euro EURUSD, +0.0888%  fell against the U.S. dollar, trading at $1.1248 versus $1.1265 late Friday in New York.
Read: A look at the winners if Greece quits the euro?
Other markets: Germany’s DAX 30 index DAX, -1.89%  fell 1.9% to 10,984.97, while France’s CAC 40 index PX1, -1.75%  gave up 1.8% to 4,815.36. The U.K.’s FTSE 100 index UKX, -1.10%  lost 1.1% to 6,710.52.
European Central Bank President Mario Draghi told a European Parliament committee Monday afternoon the bank is working toward a resolution of Greece’s debt talks, but said the “ball lies squarely in the camp of the Greek government to take the next step.”
Elsewhere, the Bank of Russia on Monday cut its key interest rate to 11.5% from 12.5%, citing lower inflation risks and fears of a considerable slowdown in the economy. The Russian ruble USDRUB, -0.7839%  rose against the dollar after the decision, leaving the greenback to buy 54.506 rubles compared with 56.751 earlier Monday.
“The oil price at $60 is still a problem for the Russian central bank and we could expect more rate cuts to come to fade the effects of the falling oil price,” said Naeem Aslam, chief market analyst at AvaTrade, in a note Monday.
Movers: Among corporate movers, shares of Metro AG MEO, -4.67% fell 4.7%. The German retailer said Monday it is selling its Galeria Kaufhof department stores and its Belgian subsidiary for €2.83 billion to Hudson’s Bay Co.
Shares of Deutsche Annington Immobilien SE ANN, -5.48%  lost 5.6% following plans by the real-estate company for a €2.25 billion capital hike to fund its expansion in the southern German property market through the purchase of Suedewo.
Thomas Cook Group PLC TCG, +0.58% shares gained 0.6% as the company and Fosun International Ltd. 0656, +0.73% established a joint venture to develop tourist activities for the Chinese market under Thomas Cook brands.

Bloombeg Politics on Jne 15, 2015: Jeb Bush Prepares to Formally Announce Presidential Campaign

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The Brief

Jeb Bush Prepares to Formally Announce Presidential Campaign

After six months of raising money and talking to voters, the Republican takes aim at the family business.

DealBook Today's Top Headlines on June 15, 2015.: Greek Debt Talks Break Down Again | Conflicts of Interest in Private Equity Fee Practices | Challenges of Maintaining a Business Dynasty | Saks Fifth Avenue's Owner to Buy German Chain.

Monday, June 15, 2015
TODAY'S TOP HEADLINES
 
By DEALBOOK
GREEK DEBT TALKS BREAK DOWN AGAIN Another attempt at a bailout agreement for Greece fell apart on Sunday night after Greek officials angrily contended that their European counterparts in the weekend talks did not have the authority to negotiate any kind of deal, James Kanter and Landon Thomas Jr. write in The New York Times. The Greek officials who traveled to Brussels for the talks were Nikos Pappas, a close confidant of Prime Minister Alexis Tsipras, and Yannis Dragasakis, the deputy prime minister. They met with senior-level European officials, none of whom had the same rank in their respective government posts. "They wanted us to hit our targets by slashing pensions and increasing taxes," said one senior member of the Greek negotiating team, Mr. Kanter and Mr. Thomas write. "But they had no mandate to negotiate."

From NYT Toda's Headlines - June 15, 2015:: Selected Business News

Business
Alexis Tsipras, left, prime minister of Greece, and his finance minister, Yanis Varoufakis, in Athens on Saturday. By the end of this month, Greece has to come up with 1.2 billion euros in cash to make pension and salary payments to public-sector workers.
Fears of Greek Default Rise as Weekend Talks on Debt Payment Break Down

By JAMES KANTER and LANDON THOMAS Jr.

The lack of progress increases the possibility that Greece will be forced to default on its mountain of debt, with 1.6 billion euros owed to the International Monetary Fund on June 30.
Ryan Kuehl, left, Under Armour's vice president for sports marketing and sponsorships, and Leon Duncan, the company's brand director for golf.
Under Armour Is Swinging for the Stars

By SYDNEY EMBER

As the sportswear maker finds itself in business with two of the hottest athletes in the country, it is still figuring out how best to capitalize on those relationships.
At Old Car City USA in Georgia, visitors can discover the remains of 4,200 classics.
Nature Helps Squeeze Out a Little More Mileage

By MIKE TIERNEY

Old Car City in Georgia has turned junk cars into rusty works of art, becoming a mecca for photographers. Other salvage companies have adapted to the computer age.

U.S. Stock Market Future Indications by MarketWatch on June 15, 2015: Stock futures point to losses after more failed Greek talks

marketwatch.com

Stock futures point to losses after more failed Greek talks

Barbara Kollmeyer
Losses spread from Europe equities to U.S. stock futures on Monday after another bout of failed talks between Greece officials and its creditors.

A New York-area manufacturing survey and a home builders’ index are on tap for later in the day, and investors are gearing up for a policy statement from the Federal Open Market Committee midweek.
Futures for the S&P 500 index ESM5, -0.26%  dropped 7.4 points, or 0.4%, to 2,077.50. Futures for the Dow industrials YMM5, -0.32%  fell 64 points, or 0.4%, to 17,755. Futures for the Nasdaq-100 index NQM5, -0.35%  saw bigger losses, dropping 19.5 points, or 0.4%, to 4,427.50.
A two-day Fed meeting will wrap Wednesday, and markets will be looking for clues to when the first interest-rate hike will come. “There is no chance whatsoever that the Fed will target a higher funds rate, but the prospect of using the event to signal one is coming is high,” said Chris Weston, chief market strategist at IG, in a note on Monday.
Read: Fed meeting should leave a Final Four of dates for rate hike
Weston said that signal, if it comes, could trigger more outflows from emerging-market funds, with $7.9 billion pulled out of Asia equities in a recent week.
Opinion: China’s MSCI reality check is too big to ignore
Saudi Arabia opens stock market to foreigners
The oil-rich muslim kingdom allows global investors to buy shares listed on its stock exchange for the first time.
Data for Monday includes the June Empire state index, due at 8:30 a.m. Eastern Time, followed by industrial production and capacity utilization for May at 9:15 a.m. Eastern. The National Association of Home Builders (NAHB) home builders’ index for June is due at 10 a.m. Eastern.
Need to know: Stocks may be pricey, but it’s been the pricier, the better so far this year
Stocks to watch: Standard Pacific Corp. SPF, +1.21%  and Ryland Group Inc. RYL, +1.16%  announced a $5.2 billion merger deal to create the fourth-largest U.S. home builder.
Alibaba Group Holding Ltd. BABA, -0.67%  said it will launch a pay-to-watch video subscription service called Tmall Box Office in two months, Liu Chunning, president of Alibaba’s Digital Entertainment arm, said on Sunday.
“We aim to become [the equivalent of] HBO and Netflix in the U.S.,” said Liu at a briefing at the Shanghai International Film Festival, according to The Wall Street Journal.
Greece-worry redux: Losses for the Stoxx Europe 600 SXXP, -1.15% weighed on stock futures. Europe stocks fell 1%, as Greece’s Athens Composite GD, -4.21%  sank 5% and the yield on Greece’s 10-year bond hit 12%, a level not seen since April.