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Apple to build new $1 billion campus in Texas and spend another $10 billion for new data centers as part of a five-year investment ..




























"While regulation loosens, Mike Novogratz has become retracting his over-ambitious BTC target blaming thin volumes and occasional volatility."






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JP Morgan’s top quant warns next crisis to have flash crashes and social unrest not seen in 50 years

CNBC/Hugh Son

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“Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That’s how J.P. Morgan Chase’s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday.”

USAGOLD note (12-12-2018 update): The madness of machines… . This CNBC article highlighting the thinking of  JPM’s Marko Kolanovic proved prescient given recent events both here and abroad.


Repost from 9-5-2018

The super rich of silicon valley have a doomsday plan

Bloomberg/Olivia Carville

“Years of doomsday talk at Silicon Valley dinner parties has turned to action. In recent months, two 150-ton survival bunkers journeyed by land and sea from a Texas warehouse to the shores of New Zealand, where they’re buried 11 feet underground. Seven Silicon Valley entrepreneurs have purchased bunkers from Rising S Co. and planted them in New Zealand in the past two years, said Gary Lynch, the manufacturer’s general manager. At the first sign of an apocalypse — nuclear war, a killer germ, a French Revolution-style uprising targeting the 1 percent — the Californians plan to hop on a private jet and hunker down, he said.”

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USAGOLD note:  We bring attention to this article to show the level of concern about economic, social and political instability among very rich, self-made, independently-minded entrepreneurs.  The placidity of the moment can give way to chaos in a heartbeat as anyone who has studied history – or lived through a Venezuela-type moment – will attest.  The odds of society having to deal with a breakdown at this level are slim, as these occurrences are rare.  It is the many levels of danger short of the ultimate unraveling that truly need to be hedged, bridged, survived.  Anyone who has thought their way through the problem will find their way to gold – the most effective and practical insurance policy against the dangers outlined in this article and the one that buys time… .that most valuable of commodities.


Repost from 9-5-2018

Asset Values Seen Dictating Next U.S. Recession’s Timing

The timing of the next U.S. recession is likely to hinge on the performance of stocks, bonds and other assets, according to Peter Boockvar, chief investment officer at Bleakley Financial Group LLC. Boockvar gave his outlook in a report Tuesday that referred to households’ net worth as a percentage of disposable income, as compiled quarterly by the Federal Reserve. Last quarter’s figure was a record 700 percent. “The direction of asset prices and its impact on confidence and funding” will determine when the economy’s next slump arrives, he wrote.

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That isn’t how it works

“Simple, compelling language describing cause and effect is both comforting and reassuring. The alternative to this soothing narrative is an unimaginable world of random disconcerting events. This stands in stark contrast to how we prefer to see the world around us: orderly, predictable, subject to expert management and prediction. Sorry, to say, but that isn’t how it works.” – Barry Ritholtz, Bloomberg

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Dr. Moneywise says… …It is precisely because of the ‘random disconcerting events’ of life, economy and markets that shrewd investors are always on the lookout and why they include gold and silver in their portfolio plan.   Barry Ritholtz, I might add, is the author of the book, Bailout Nation. We recommend a visit to the article linked for more of Mr. Ritholtz’ deep-thinking.

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Gold seesaws in range, biding its time

DAILY MARKET REPORT

Gold seesawed in the $1242-1247 range in overnight trading unable to make up its mind on direction. By the time New York opened it had decided to move modestly to the north– up $2 on the day at $1245. Silver is up 13¢ at $14.72 and making progress toward the important $15 mark. Yesterday’s producer price report came in at a benign .1% driven mostly by lower oil prices. Later today the Labor Department will release its closely-watched report on core inflation. Any firming there is likely to gain the attention of Wall Street traders.

The markets today are entertaining the notion of a thaw in the U.S.-China trade battle but it was another conflict – the one between the White House and Congressional Democrats – that dominated national attention yesterday. The president declared he would be “proud” to shut down the government over financing for a wall at the Mexican border. Those with a memory for major market events recalled that it was another shutdown in 2011 that caused Standard & Poor’s to downgrade the U.S government’s credit rating. Another downgrade now could have deadly consequences at a time when foreign creditors are already backing away from the U.S. treasuries’ market.

Gold, through all of it, appears to biding its time, but seemingly at the ready… … . .

Quote of the Day
“A common feature of all these earlier troubles was that, having happened, they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first blah call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a record 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.” – John Kenneth Galbraith, The Great Crash: 1929

Chart of the Day

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Chart note: This long-term gold chart is drawn in log-scale. “Common percent changes,” says Investopedia of log-scale charts, “are represented by an equal spacing between the numbers in the scale. For example, the distance between $10 and $20 is equal to the distance between $20 and $40 because both scenarios represent a 100% increase in price.” On a linear chart, the lesser values are compressed to the point that the viewer misses the strength of a price move, and the greater values are extended to a degree that they tend to dramatize a price move – up or down. The log-scale chart presents data in a more realistic framework without the drama. As you can see from the chart above, the upward trend of the gold price since the early 2000s is not nearly as strong as the move between 1970 and 1980 in percentage terms leading some analysts to believe that we have considerable upside yet to be charted.

DMR–Gold seesaws in a range, biding its time

DAILY MARKET REPORT

Gold seesawed in the $1242-1247 range in overnight trading unable to make up its mind on direction.  By the time New York opened it had decided to move modestly to the north– up $2 on the day at $1245.  Silver is up 13¢ at $14.72 and making progress toward the important $15 mark.   Yesterday’s producer price report came in at a benign .1% driven mostly by lower oil prices. Later today the Labor Department will release its closely-watched report on core inflation.  Any firming there is likely to gain the attention of Wall Street traders.

The markets today are entertaining the notion of a thaw in the U.S.-China trade battle but it was another conflict – the one between the White House and Congressional Democrats – that dominated national attention yesterday.  The president declared he would be “proud” to shut down the government over financing for a wall at the Mexican border.  Those with a memory for major market events recalled that it was another shutdown in 2011 that caused Standard & Poor’s to downgrade the U.S government’s credit rating.  Another downgrade now could have deadly consequences at a time when foreign creditors are already backing away from the U.S. treasuries’ market.

Gold, through all of it, appears to biding its time, but seemingly at the ready… … . .

Quote of the Day
“A common feature of all these earlier troubles was that, having happened, they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first blah call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a record 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.” – John Kenneth Galbraith, The Great Crash: 1929

Chart of the Day

External image

Chart note:  This long-term gold chart is drawn in log-scale. “Common percent changes,” says Investopedia of log-scale charts, “are represented by an equal spacing between the numbers in the scale. For example, the distance between $10 and $20 is equal to the distance between $20 and $40 because both scenarios represent a 100% increase in price.” On a linear chart, the lesser values are compressed to the point that the viewer misses the strength of a price move, and the greater values are extended to a degree that they tend to dramatize a price move – up or down. The log-scale chart presents data in a more realistic framework without the drama. As you can see from the chart above, the upward trend of the gold price since the early 2000s is not nearly as strong as the move between 1970 and 1980 in percentage terms leading some analysts to believe that we have considerable upside yet to be charted.

3- Mudarabah

“Mudarabah” is a special kind of partnership where one partner gives money to another for investing it in a commercial enterprise. The investment comes from the first partner who is called “rabb-ulmal”, while the management and work is an exclusive responsibility of the other, who is called “mudarib”. The difference between musharakah and mudarabah can be summarized in the following points:

(1) The investment in musharakah comes from all the partners, while in mudarabah, investment is the sole responsibility of rabb-ulmal.  

(2) In musharakah, all the partners can participate in the management of the business and can work for it, while in mudarabah, the rabb-ul-mal has no right to participate in the management which is carried out by the mudarib only.

(3) In musharakah all the partners share the loss to the extent of the ratio of their investment while in mudarabah the loss, if any, is suffered by the rabb-ul-mal only, because the mudarib does not invest anything. His loss is restricted to the fact that his labor has gone in vain and his work has not brought any fruit to him. However, this principle is subject to a condition that the mudarib has worked with due diligence which is normally required for the business of that type. If he has worked with negligence or has committed dishonesty, he shall be liable for the loss caused by his negligence or misconduct.  

(4) The liability of the partners in musharakah is normally unlimited. Therefore, if the liabilities of the business exceed its assets and the business goes in liquidation, all the exceeding liabilities shall be borne pro rata by all the partners. However, if all the partners have agreed that no partner shall incur any debt during the course of business, then the exceeding liabilities shall be borne by that partner alone who has incurred a debt on the business in violation of the aforesaid condition. Contrary to this is the case of mudarabah. Here the liability of rabb-ul-mal is limited to his investment, unless he has permitted the mudarib to incur debts on his behalf.  

(5) In musharakah, as soon as the partners mix up their capital in a joint pool, all the assets of the musharakah become jointly owned by all of them according to the proportion of their respective investment. Therefore, each one of them can benefit from the appreciation in the value of the assets, even if profit has not accrued through sales.  

The case of mudarabah is different. Here all the goods purchased by the mudarib are solely owned by the rabb-ul-mal, and the mudarib can earn his share in the profit only in case he sells the goods profitably. Therefore, he is not entitled to claim his share in the assets themselves, even if their value has increased.[1]

[1] However, some jurists have opined that any natural increase in the capital may be taken as a profit distributable between the rabbul-mal and mudarib. For example, if the capital was in the form of sheep, and lambs were born to some of them, these lambs will be taken as profit and will be shared between the parties according to the agreed proportions (see al-Nawawi, Rawdat al-Talibin , 5:125). But this is a minority view.