From Reorg Research - 

Puerto Rico got some good news this week as PREPA reached a restructuring deal with its forbearing bondholders - though MBIA has not yet signed on to the deal. The commonwealth's House minority leader, meanwhile, has filed a lawsuit against the government seeking documents relating to PREPA's new fuel contracts. The offshore drilling sector drove the energy news, with Vantage Drilling announcing on Tuesday that Brazilian oil giant Petrobras was canceling its contract for the drillship Titanium Explorer while bondholders have organized hiring advisors from Blackstone and Milbank Tweed. 

Brilliance from Bloomberg -

On March 30, 1999, an 11-month-old, money-losing Internet company called Priceline.com went public, to the great excitement of investors. By the close of trading the stock price had more than quadrupled and the company was, as Saul Hansell put it in the New York Times the next day, “worth more than United Airlines, Continental Airlines and Northwest Airlines combined.”

For the next year or so, Priceline.com was one of the most-cited examples of, depending on one’s inclination, either the import or insanity of the Internet boom. Its ubiquitous TV ads featuring William Shatner also got lots of attention, as did founder Jay Walker’s claims that the company’s name-your-price model would “reinvent the environmental DNA” of business. But it was its market valuation that drove the fascination, and after the stock price collapsed from a high of $974.25 a share in April 1999 to $6.75 in December 2000, people mostly stopped talking about Priceline.com.

Full Article

GOLD - Gold supported in the short term

Financial markets continuously show strong volatility.

After significant losses in the previous week, stock markets partly record significant gains last week. On Thursday, the oil price increased by more than 10%, a jump that was last seen in 2008. This development was mainly triggered by China’s interest rate cut as well as by surprisingly positive economic data from the US and Europe. Gold on the other hand was rather on the losing side: After the metal opened the week at 1,168 $/oz, the price dropped down to 1,117 $/oz on Wednesday and only slightly recovered to 1,134 $/oz on Friday. The economic situation in China and timing of the expected interest rate hike in the United States remain in the major focus of market participants. Contradictory signals came from the US Fed: while domestic economy shows a positive development, growth slows down in emerging countries. Thus, expectations increasingly shift towards an interest rate hike in December instead of September. This should give support to the Gold price, at least in the short term. We therefore do not expect the metal to drop below 1,100 $/oz in the near future. Technically Gold get support at 1,117 $/oz, upwards resistance is around 1,148 $/oz and 1,170 $/oz. 

After the Euro was not able to maintain its gains and fell from over 1.17 to below 1.12 Gold recorded significant gains in Euro terms: The price increased from 979 €/oz mid-week to 1,015 €/oz at the end of the week.

 

SILVER - Weakest level since 2009

Subdued industrial demand determines price development.

For the first time in 6 years, Silver briefly fell below the mark of 14 $/oz on Wednesday. The Gold/Silver-ratio rose further to 80. At the end of the week the Silver price could increase slightly due to more robust economic data, rising oil prices and recovering stock markets, however the metal still trades on a very low level. Worries about an economic slowdown in China and in other emerging markets, overall low oil prices and volatile stock markets suppress industrial demand for the metal. This subdued outlook for industrial demand currently appears to be the main driver of the Silver price development, whereas its character as "safe-haven" investment fades into the background. While Gold as a "safe haven" rather benefits from a postponed rate hike, Silver remains under pressure. However, the physical demand could pick up significantly due to the low price levels, particularly in the middle of last week.

 

PLATINUM - Sentiment remains subdued

After significant losses Platinum picks up at the end of the week.

After a strong week with prices over 1,000 $/oz Platinum could not oppose to the pressure of falling commodity prices. In a still volatile market a price level above 1,035 $/oz could not be achieved and the price of the metal fell midweek to below 970 $/oz. Due to the continuing tense situation in South Africa, and the persisting latent risk of a supply shortage Platinum was under less pressure than its sister metal Palladium. Despite the fact that the market prevails in a negative mood, Platinum was able to climb again to over 1,000 $/oz later in the week. On the other end of the scale the six and a half-year low of 945 $/oz could be within reach. Even with prices falling industrial demand remained weak, which is also reflected in the low sponge premiums we currently record.

Platinum has been at a discount to Gold for 8 consecutive months. So far, this is the longest time period in which the Gold/Platinum ratio has continuously traded below parity.

 

PALLADIUM - When will prices touch bottom?

Weakening automotive industry causes significant losses.

With prices below 530 $/oz Palladium dropped to a five-year low last week. Although the metal could partly recover and reached 590 $/oz shortly before the weekend, the overall mood remains poor. Palladium in particular suffers heavily from decreasing demand in the automotive industry. The news are dominated by downwards adjustments of auto sales forecasts for important markets such as China, Russia and Brazil. At the same time Platinum production has recovered to pre-strike levels. Technically, the next support for Palladium is around 500 $/oz, a break of this mark could set into motion a further downward spiral. However, this scenario still seems far away right now. In EUR the price briefly fell to less than 15 €/g, however, even below this threshold no increased buying interest could be observed.

 

RHODIUM, RUTHENIUM, IRIDIUM - Rhodium again under pressure

Ruthenium and Iridium without substantial revenues.

In the course of softer prices during the last week, the subdued sentiment did not pass by Rhodium and the market recorded a price decline. Demand for the metal remains cautious, mainly investors’ sales can be observed.

For Ruthenium and Iridium, the week was extremely quiet and uneventful. We experienced a very low level of market activity and hardly notable demand for both metals.

Have a great week.

 

Martina Fischer
Head of Marketing & Communications

 

Global Business Unit

Heraeus Metal Management

Marketing & Communications

 

Heraeus Deutschland GmbH & Co. KG
Heraeusstrasse 12-14

63450 Hanau, Germany

 

Phone: + 49 6181 / 35-9648

Mobile: + 49 1590 / 4010522

E-Mail:  martina.fischer@heraeus.com

Web:     www.heraeus.com

• HSBC says "we are lowering our platinum group metals (PGM) and silver forecasts across the board in light of the China- inspired commodity-wide sell-off"
• HSBC sees platinum to average $1,126 per ounce in 2015 and $1,235 per ounce in 2016
• HSBC lowers silver price forecasts for 2015, 2016 to $15.60 per ounce and $16.90 per ounce
• HSBC lowers palladium price forecasts for 2015 and 2016 to $701 per ounce and $725 per ounce respectively
• HSBC says, "we have revised our average 2015 and 2016 forecasts to $1,160 per ounce and $1,205 per ounce, respectively" for gold price (on 27 July 2015)

While China's stock markets seldom reflect the true nature of the economy, the plunge, coupled with Beijing's unexpected currency devaluation in mid-August, has dented confidence in the government and added to fears that the economy may be at risk of slowing more sharply than earlier expected. - Rueters 

He has very strong points in this post - 

Oil prices are falling, seemingly inexorably. Emerging market countries are having currency crises. A previously unstoppable East Asian economic power -- the world’s second-largest economy -- is slowing, and the country’s leaders at times seem to have lost the plot. Russia is an economic mess. Europe’s economy is being held back by German political decisions and doubts about the common currency. The U.S. economy is relatively strong, but is beset by a productivity paradox in which remarkable Silicon Valley innovations don’t seem to be having an impact on the economic data.

Is this year starting to feel like it belongs in the 1990s, or what?

http://www.bloombergview.com/articles/2015-08-21/the-global-economy-is-looking-very-1990s

OPED from Larry Summers, WaPo

- Interesting read, interesting take from Larry -  

First, the era of agreements that achieve freer trade in the classic sense is essentially over. The world’s remaining tariff and quota barriers are small and, where present, less reflections of the triumph of protectionist interests and more a result of deep cultural values such as the Japanese attachment to rice farming. What we call trade agreements are in fact agreements on the protection of investments and the achievement of regulatory harmonization and establishment of standards in areas such as intellectual property. 

https://www.washingtonpost.com/opinions/rescuing-the-free-trade-deals/2015/06/14/f10d82c2-1119-11e5-9726-49d6fa26a8c6_story.html

GOLD - Rising US interest rates and weak signals from China

After the metal broke through the important mark of 1,100 $/oz, Gold is at a level that was last seen 5 years ago.

While a rate hike by the US-Fed is still expected this year, the last FOMC meeting on Wednesday has not given any clear signal as to whether it will take place in September or December. The development of the US labor market is considered as the most important criterion to determine the effective date. While the current positive data could suggest an early adjustment, other factors such as the low price of oil, rapid losses on the stock markets in China and the euro crisis put pressure on the overall sentiment.

GFMS’ latest quarterly Gold report, which was released last Tuesday, shows an overall restrained demand for Gold. The research firm estimates the global physical Gold demand in Q2 to be at its weakest since 2009. The main reason is a significant slowdown in demand from China, where the jewelry sector was down by more than 23%. A few positive signals came from the German market; low prices attracted buyers and resulted in increasing demand for investment bars. Confidence in Gold as safe haven investment seemed to suffer a setback in recent weeks. ETFs showed significant outflows: with ETF-holdings reduced by more than 2 million ounces between the beginning and end of July.

 

SILVER - Firmer than Gold

Silver takes advantage of its versatile character.

Unlike Gold, an increased demand for silver was recorded in the 1^st half year 2015. For the full year 2015, the Silver Institute forecasts a 5% increase in jewelry demand and a 2% growth in demand for industrial applications. The Gold/Silver ratio improved slightly in favor of Silver and is now at 73.50 (July high: 76.50) However, speculative short-positioning at CME has reached a record level. Sudden and abrupt short covering rallies that lead to short-term price gains cannot be ruled out and are even highly probable. Technically, Silver gets solid support around its 2014 low at 14,53 $/oz. Resistance is seen at 15.00 $/oz.

 

PLATINUM - Price stabilizes at low level

After the reduction of speculative long positions, Platinum appears to have stabilized below the psychological mark of 1,000 $/oz.

Similar to Gold, Platinum trades at a price level that could be observed more than 5 years ago. The discount of Platinum to Gold has meanwhile reached 115 $/oz. As long as the support at 970 $/oz is not broken, a price increase to levels of 1.060 $/oz seems to be possible. With prices on such a low level, the pressure on the South African mining industry continues to increase. Two of the largest platinum producers, Anglo American and Lonmin, recently announced restructurings and production cuts in the mid-term, however, opinions differ as to whether these measures could be implemented in due time. Political pressure on the miners as a critical industry sector, combined with the producers’ need to upkeep cash-flow, could be limiting factors. Sponge premiums on a low level reflect restrained industrial demand for Platinum. Some positive news comes out of China; for the first time since mid-June, increased buying interest could be observed at the SGE.

 

PALLADIUM - Palladium with cautious outlook

Weak forecast for China’s auto market puts the metal under pressure. Trading ranges between 608.50 $/oz and 631.50$/oz

While Palladium outperformed the other precious metals last year, the metal now suffers heavy losses. Since March 2015 the price fell by 25%, mainly due to increasingly subdued outlook for automotive production in China, the important growth market for gasoline engines.

Support for Palladium is currently around 613 $/oz, resistance at 653 $/oz, but the 600 $/oz mark looms on the horizon. Restrained industrial demand might be an indicator that buyers wait for prices below the psychological mark of 600 $/oz. 

 

RHODIUM, RUTHENIUM, IRIDIUM - Mid-term sentiment negative

Difficult situation of the South African mining industry does not stop at Minor PGMs.

Despite a relatively limited primary supply and a good physical demand at the same time from major consumers such as the automotive and chemical industries, the Rhodium price has come under heavy pressure. The trading environment can be described as nervous and difficult, investors are partly active to liquidate positions. The Rhodium market shows a volatility that has not been observed for quite some time.

The largest industrial consumer of Ruthenium is the electronics industry for storage media. Despite high metal availability and prices on a low level, very little demand can be observed. There is a strong interest among consumers for price hedges, however, few transactions are closed. The Iridium market remains relatively quiet. Physical demand for the metal remains restrained. Nevertheless, the low prices barely induce market participants to hedge prices.

 

Have a great week!

 

Martina Fischer
Head of Marketing & Communications

 

Global Business Unit

Heraeus Metal Management

Marketing & Communications

 

Heraeus Deutschland GmbH & Co. KG
Heraeusstrasse 12-14

63450 Hanau, Germany

 

Phone: + 49 6181 / 35-9648

Mobile: + 49 1590 / 4010522

E-Mail:  martina.fischer@heraeus.com

Web:     www.heraeus.com

This couldn't get any better - ATHENS (Reuters) - Some members of Greece's leftist government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to reports on Sunday that highlighted the chaos in the ruling Syriza party.  

http://finance.yahoo.com/news/greek-pm-tsipras-under-pressure-141355344.html

Love this stuff, always a great economic indicator - 

"Sales activity in the Chicago area reached a new record high, hitting 52,239 units for the first half of the year, the most since 2006 and 9% higher than during the first half of 2014, according to data from RE/MAX.

“We’re seeing a much more robust housing market this year than in 2014 and even 2013,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. 

“A combination of factors is at work – mortgage interest rates remain low, the economy is adding jobs at an encouraging rate and there’s a larger inventory of homes for sale,” Merrion continued.

Additionally, home values continued rising. The median sales price of a home in the metro area climbed 11% during the first half of 2015 when compared to the same period in 2014, coming in at $210,222. This is the highest median sales price recorded for the period since 2008"

http://www.housingwire.com/articles/34525-chicago-home-sales-hit-new-record-high

HFT IPOs are now the normal?

The owners of Flow Traders, a Dutch high-frequency trading firm, plan to sell around 40 percent of the business through a listing of its shares on the Euronext stock exchange in Amsterdam, the company said on Thursday.
Reuters

It was fun but we have morphed into another project of Hagan's:
 Zermatt Data Corp. www.zermattresearch.com

Until Then, Enjoy The Last...

Superfund Macro Report

Headlines
Restructuring Wall Street: The by-product of nearly 1200 mergers, JPMorgan Chase & Co. $JPM is in the business of expansion, while slashing jobs... -LINK

In Depth
IPO News: Spread your wings: Wingstop sets terms for $75 million IPO - LINK

Virtual Reality is coming to main street. Oddly enough, VR will first be used for taxes and other sensitive issues regarding personal information that often lead journalists and the masses to suspicion. Game on.

Why The TBAC Is Suddenly Very Worried About Market Liquidity - LINK

Onward Profits!

Chad


Chad Hagan
Founding Partner, Hagan Capital Group
Follow Chad on StockTwits
Trade Precious Metals at HC Precious Metals

For the sake of law-

It has been 800 years since English barons negotiated a written peace agreement with King John. The original June 1215 agreement was revised and reissued numerous times, with the 1217 version gaining the title Magna Carta (“Great Charter”). Over the centuries, the document has had a powerful influence of the evolving British legal system and government.

The Great Charter will be explored at a Cato conference this week, and David Boaz recently blogged about the document’s importance to the American founding.

If you are interested in a very brief primer, I noticed this article (page 64) by British historian David Starkey in BBC History magazine. Starkey describes the 1215 charter as a radical break, and also the beginning of a long evolutionary process of building parliamentary government in Britain.

Brief Summary:

Magna Carta was initially drafted in 1215 in an attempt to broker peace between England’s barons and the unpopular King John. It failed, and the country was plunged into civil war. Following John’s death the charter then underwent a series of revisions over the next decade. An updated version was issued in 1216 by the government of his successor, the young Henry III, in an attempt to placate the rebels. Having won the war, the king issued a new edition in 1217 in order to cement peace. The final version was produced in 1225 in return for a grant of taxation.

And here are some of Starkey’s thoughts:

[Magna Carta] set out to do three things. Firstly, to bridle a king, John, who was dangerous and unpredictable  and made his whim the law, and secondly, to make it impossible for any other king to rule in the same way. It was successful in both of those things. The third thing was the great change, and something very different: it set out to create machinery that absolutely bound any king in iron to its measures.

… One of the things that we forget is that the Magna Carta of 1215 had 62 or 63 clauses, while the long-term one has in the region of 40. A third of it was struck out in 1216 …

… It had an immense and immediate impact on law and on the development of law. Individual clauses are very quickly pleaded. What’s striking is how many copies were circulated. It forced governments to behave differently, and set rules for good behaviour and, once the charter was reissued in 1225, it became impossible to impose general taxation without consent.

I think you are repeatedly struck by the ambition of 1215. Whatever you may think about the motives of the people like Robert Fitzwalter, clearly I rather respect ambition. I respect radicalism; I don’t necessarily like it, but I respect it. They are intellectually ambitious, which is impressive whatever one thinks. How do we go about setting an absolute monarch in chains?

http://www.cato.org/blog/magna-carta-800

There is an avalanche of high-level event risk due in the week ahead. Beware volatility and mark the key releases and trends for your trades.

• US Dollar Breakout Velocity Rests with Fed’s Liftoff Outlook after NFPs
• EUR/USD Faces Week Flush with Event-Driven Volatility
• GBP/USD Carves Bearish Pattern Ahead of BoE Interest Rate Decision
• Japanese Yen Stumbles, but is a USDJPY Rally Above ¥124 Justified?
• Australian Dollar Volatility Ahead on RBA, China PMI and US Jobs Data
• Gold Range Carries Into June- Opening Range in Focus Ahead of NFP

From DailyFX

http://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2015/05/30/Weekly-Forecast-Front-Page.html?CMP=SFS-70160000000NbUQAA0

Nobody Says No

When was the last time someone gave you a clear and firm “no”? If you find yourself in fundraising mode (and the reality for most startups is that they are in perpetual fundraising mode) you will have experienced that very few people, if any, ever say no. They will say things like:

“It’s not the right stage for us but keep us in the loop”.

“We like what you’re doing but need to do a bit more due diligence.”

“We are currently not investing into your sector - but please keep us informed about your progress.”

The same is true for many other conversations such as business development, etc. Nobody likes to say no. And nobody wants to be that guy who said no to the next Steve Jobs, Mark Zuckerberg or Sophia Amoruso.

What this means for you is that you need to become very good at reading people and understanding their answers in the context of what they are doing. All too often I have seen entrepreneurs who are chasing dead opportunities as they believe that the lack of a clear no means yes.

Always Run. Never Walk.

Pascal Finette

Nobody Says No - http://theheretic.org/2015/05/23/nobody-says-no/ via @pfinette

Thx Pascal - Chad

The New York Stock Exchange, part of the Intercontinental Exchange (NYSE: ICE) global network of exchanges and clearing houses, today announced the NYSE Bitcoin Index (NYXBT), the first exchange-calculated and disseminated bitcoin index. Launching today, the NYXBT Index will represent the U.S. dollar value of one bitcoin unit based upon actual transactions occurring on select bitcoin exchanges which have been evaluated and meet NYSE’s quality standards. “Bitcoin values are quickly becoming a data point that our customers want to follow as they consider transacting, trading or investing with this emerging asset class,” said NYSE Group President Thomas Farley. “As a global index leader and administrator of ICE LIBOR, ICE Futures U.S. Dollar Index and many other notable benchmarks, we are pleased to bring transparency to this market. By combining our technology infrastructure with our expertise in index calculation and data management, we will continue to launch complimentary products based on our rigorous standards and proprietary index methodology.”

- http://www.streetinsider.com/Corporate+News/NYSE+Announces+Bitcoin+Index/10576502.html?si_email_click=2015051908

No longer a safe haven for the average investor? Never really was. By all means common investors should stay clear of ETNs, and perhaps now ETFs. 

'Since 2008, trading volumes of the five-largest credit ETFs have grown 75-fold, according to a Greenwich Associates study released Monday. About 12 percent of institutions surveyed by the Connecticut-based research firm reported having traded ETFs in increments of more than $100 million, according to the report' -  From Bloomberg -http://www.bloomberg.com/news/articles/2015-05-18/a-200-million-hedge-fund-trade-in-your-bond-etf-is-normal-now

From Platts:

Shell plans to use the drillship M/V Noble Discover and the drilling unit Transocean Polar Pioneer for its planned Arctic drilling this summer. The two vessels will provide relief-well capabilities for each other, BOEM said in a statement. The conditional approval was lambasted by environmentalists Monday, claiming the administration has unnecessarily exposed the Arctic to an oil spill. "Any major Arctic Ocean spill would be impossible to clean up," Franz Matzner, director of the Natural Resources Defense Council's Beyond Oil Initiative, said in a statement. Such a spill would be "catastrophic" since Shell's proposed drilling takes place more than 1,000 miles from a Coast Guard base and other cleanup infrastructure, Matzner said. "Accidents can and do happen; and there is no proven way to respond to an oil spill in icy Arctic waters," Susan Murray, a deputy vice president with Oceana, said in a statement. In March, Interior upheld its 2008 Arctic lease sale, which had been suspended by a federal court ruling. Under that ruling, BOEM updated an estimate of recoverable oil in the Arctic area it had leased the rights to, boosting the estimate from 1 billion barrels to 4.3 billion barrels. Shell has requested a five-year extension on its Arctic leases, which the company said it needs before it invests hundreds of millions of dollars more in the Arctic. Federal officials have not ruled on this request. Shell has already spent about $6 billion on its Arctic drilling efforts.

Savannah has an Aa2 rating -

New York, April 28, 2015 -- 

Large shifts in cargo from the West Coast to the East Coast resulting from the completion of the Panama Canal expansion in 2016 are unlikely, Moody's Investor Service says in "Panama Canal Expansion: West Coast Ports Maintain Advantage, while East Coast Municipalities Benefit from jobs." 

"In most cases, shipments from Asia to West Coast ports will arrive at inland destinations faster than via an all-water route to the East Coast through the Panama Canal," Moody's Analyst and report author Myra Shankin says. "Additionally, ports' long-term contracts contain minimum annual guarantees, which will protect the West Coast ports from swings in cargo volume and revenues. However, ongoing labor and operational difficulties at West Coast ports could shift cargo traffic if not resolved." 

Some local governments located closest to US East Coast ports will benefit economically, however. Those gaining will be ports with water depths deep enough to accommodate the larger ships and with the best intermodal transportation connections. 

"Even a muted uptick in cargo volume from Panama Canal activity will provide at least some increased revenue for local governments. Notable municipal 'winners' will be in the Norfolk, VA (Aa2) and Savannah, GA (Aa2) regions," Moody's Analyst and report author Coby Kutcher says. Charleston, SC (Aaa stable) will also benefit, Kutcher says. 

While only a minimal impact for East Coast ports' cargo volumes is anticipated, Moody's says it's enough to increase revenue for these local governments. Also, the preparation work going on at the East Coast ports has already created economic activity that benefits the local governments. In addition, these municipalities are insulated from investment risk because they have not borne the costs of the canal expansion. Rather, their state, private developers or other parties have incurred the associated costs. 

In the longer term as cargo volumes grow, more cargo will head to ports readied for the larger ships on both coasts. This additional traffic, as well as relocated or new businesses such as distribution centers, will bring permanent jobs and benefit the local governments of these East Coast ports with growing tax revenues.

https://m.moodys.com/mt/www.moodys.com/research/Moodys-Panama-Canal-expansion-will-benefit-East-Coast-local-governments--PR_323937?WT.mc_id=%40moodysratings&un_jtt_redirect=un_jtt_iosV

NYMEX-U.S. crude holds near 2015-high as stockpiles grow less than expected

SEOUL, April 30 (Reuters) - U.S. crude futures held around $58.50 a barrel on Thursday, near their highest this year as U.S. crude stockpiles grew less than expected after the first decline since November in stocks at the main U.S. delivery hub. FUNDAMENTALS * U.S. crude futures CLc1 had edged down 15 cents to $58.43 a barrel by 0013 GMT. They closed up $1.52 at $58.58 a barrel on Wednesday, after hitting a 2015-high of $59.33.