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US Producer Prices Tumble Most Since 2009 (And It Wasn't All Energy-Related)
Submitted by Tyler Durden on 02/18/2015
The drop in the price of energy will be initially blamed for the 0.8% MoM drop in Producer Prices Final Demand (far more than 0.4% drop expected) and the most on record. However, ex-food-and-energy, PPI also fell 0.1% (missing expectations of a 0.1% rise) and ex-food-and-energy-and-trade-services, PPI fell 0.3% - so it's not just the energy price drop (even though fuels and lubricants dropped 9.3% MoM). In fact the biggest MoM drop was in furnishings, computer hardware, and TV, video, and photo equipment.
US Industrial Production Misses (Again) As Manufacturing & Construction Growth Disappoint
Submitted by Tyler Durden on 02/18/2015
With a mere 0.2% rise in manufacturing production (missing expectations of a 0.4% rise), and capacity utilization printing 79.4%, missing expectations of a rise to 79.9%, it is no surprise that overall industrial production missed expectations for the second month in a row. Motor vehicle production fell 0.6% in January and construction supply fell 0.3% - the most in 10 months.
Housing Starts, Permit Miss Expectations on Drop In Single-Family Housing
Submitted by Tyler Durden on 02/18/2015
Earlier today, we got a hint that hopes that the 5th dead cat "housing rebound" bounce have been indefinitely delayed after Mortgage Applications cratered by over 13% after tumbling 9% in the week before on even the most fractional of 10 Year yield increases. That hope suffered another embarrassing defeat moments ago when the Census Bureau reported that in January both housing starts and permits missed expectations, rising at 1070K and 1053K, respectively, once again missing Wall Street consensus of 1089K and 1067K. The reason: yet another drop in single-family housing. Because while multi-family, i.e., rental units, remained brisk and rose from 340K to 381K for the starts and from 360K to 372K for the permits...
The Catastrophic Costs of Extend-And-Pretend Are About To Crush Europe
Submitted by Tyler Durden on 02/18/2015
Extending imprudently massive loans to marginal borrowers always plants the seeds of disaster, and extending and pretending turns a potentially containable disaster into an uncontainable financial calamity. Yet this is the game plan of policymakers everywhere, from Europe to the U.S. to China--extend enormous loans to marginal borrowers and then mask the inevitable defaults with extend-and-pretend policies that vastly increase the size of the debt. By the time extend-and-pretend finally reaches its maximum limits, the resulting implosion is so large that the shock waves topple regimes, banks, currencies and entire nations.
Nigel Farage on "The Great Game of Poker Over The Future of The Euro"
Submitted by Tyler Durden on 02/17/2015
"There is a great game of poker taking place for the future of this currency," Nigel Farage exclaims as he deservedly takes a small victory lap over his warnings of the anti-democratic nature of the dis-union that has been created. As his warnings that "the EU will crush, and kill, and destroy nation state democracy," have gone unheeded, this last week has seen The Euro group’s behavior justify everything Farage has feared... Juncker: "there can be no democratic choice against the Euro."
"In The End Capital Controls Will Probably Have to Be Imposed" - Euro group Official
Submitted by Tyler Durden on 02/17/2015
One thing is becoming clear: Greece will almost certainly not last until the proverbial D-Day on February 28 before it either i) runs out of money, ii) is forced to sign a "bailout extension" deal with the Euro group thus crushing its credibility with the people, or iii) exits the Eurozone. Needless to say, two of the three above options are very unpleasant for Greek savers, assuming any are left. And it is those savers that the Eurozone is directly targeting when it does everything in its power to provoke a bank run with statement such as these: "The situation of the banks is getting more and more difficult every day," said a European official. "In the end, in order to safeguard the banking system, capital controls will probably have to be imposed."
Greece to Run Out Of Cash In Under One Week
Submitted by Tyler Durden on 02/18/2015
"February 24 is expected to be the first crucial day for state finances, as projections of cash flows see state coffers starting to run dry on that date. The state of cash reserves – not robust before – has deteriorated further in recent days due to a shortfall in revenues, as a 1-billion-euro hole in January revenues is putting the execution of the state budget in jeopardy and hampering the management of cash reserves. Given these figures, the Finance Ministry estimates that cash reserves will run out next Tuesday.
Our thanks to www.zerohedge.com for the above article headlines of the day
Gold Chart
Gold has arrived at the 2015 uptrend line. The price pattern itself is a choppy and overlapping configuration and that is suggestive (at least so far) that the bull market in gold has not yet resumed. In other words, odds favor it’s a countertrend move. With that said, odds are high that we are near a short term low. The ideal time is today through Friday and the support point is the 1188-1202 area. While that is the odds favored time, keep in mind they are odds and not absolutes. This support line is the last hard support until 1167-1172. So while the medium term still points down, odds are high that we are going to make a low in this area and push higher into the beginning of March. Those odds are about 75%.
Resistance is the 1212-1218 area and support is 1188-1202 at the moment. In summary, while the trend remains down, odds favor we make a low between 1188-1202 and move higher into month end and odds favor that low is between now and Friday’s close.
 
Cycles
The most important discussion is that the cycle inversion has caused a rotation change back to red cycle lows. While gold moves higher from red cycle lows, they are overall bearish, and while the rallies are usually choppy and overlapping, they can also break down without warning. With that said, the cycle low that is due Feb 19th (Plus or minus 72 hours) is now at its peak time where a low should develop. Support is the blue and red trend lines between the 1185-1197 area. Odds are 75% (not 99%) that we make the low as listed above between now and Friday.
Silver
Silver has support from 1609-1630 and then at 1550. Resistance is 1660-1680 and 1725-1735. Overall silver has the same status as gold in that all trends remain down but a short term two week bounce is due to begin near this area of time and price.
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