Jim’s Mailbox

Posted at 11:36 AM (CST) by & filed under Jim's Mailbox.

Jim,

My Take? A potential “Black Swan” in disguise. Another “between a rock and a hard place” scenario.

With VIX soaring into bullish territory, and SKEW screaming disaster, something is askew. Perhaps manipulation.

One day, the VIX will go belly up as it will not be able to fulfill its purpose and the hopes for billions of dollars in asset protection will disappear in a puff of smoke.

The whole ETF arena reeks.  Nothing more than promises with zilch backing them.

A gentle reminder to those using Gold and Silver ETFs as protection: If it ain’t in your hand… it ain’t!

CIGA Wolfgang Rech

Options Market “Crash” Indicator Hits Peak Panic, Surpasses Record Highs

Submitted by Tyler Durden on 10/16/2015 – 09:44

Since we first exposed (and explained) the Black-sh Swan-link nature of the options market’s Skew Index, the mainstream media has lept to various conclusions (from ignore it, like everything else, to ‘wow’). However, what is crucial to comprehend is that the soaring Skew is occurring at the same time as a collapsing VIX. However, what we have seen over the last two days is somewhat unprecedented – VIX has continued to collapse into option expiration (and we know the pattern that occurs after opex)as SKEW has soared to new all-time record highs.

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…as SKEW has soared to new all-time record highs.

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Jim,

Over the past week, we’ve heard of most major hedge funds incurring huge losses. We’ve heard of 2 major bond funds closing. Now, the world’s largest ETF (Nomura) is having liquidity issues! (Pay attention gold and silver ETF holders).

There are no places left to hide. GOT GOLD? Let’s get physical!
CIGA Wolfgang Rech

World’s Largest Leveraged ETF Halts Orders, Citing “Liquidity Constraints”
Submitted by Tyler Durden on 10/14/2015 23:39 -0400

First The Bank of Japan destroyed the Japanese bond market, and then, back in May we warned that The Bank of Japan had ‘broken’ the stock market. Now, it appears the all too obvious consequences of being the sole provider of buying power in an antirely false market are coming home to roost as Nomura reports the “temporary suspension” of new orders for 3 leveraged ETFs – the largest in the world – citing “liquidity of the underlying Nikkei 225 futures market.”

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Source: Nomura

As Bloomberg reported previously on Nomura’s funds,

Money is being shredded at an unprecedented rate in a souped-up exchange-traded fund tied to Japan’s most famous stock index.

Since mid-August, investors have poured a record $4.5 billion into the Next Funds Nikkei 225 Leveraged Index ETF, a security designed to rise or fall twice as fast as its namesake equity gauge. That’s too bad, considering that twice the Nikkei 225 Stock Average’s loss over that period comes out to about 21 percent.

So fast have the country’s individual investors been plowing money into the fund that even as a fifth was lopped off its price, its market value more than doubled. It’s the largest security of its kind in the world, and is now big enough to affect the whole stock market as overseers rush to buy and sell securities to meet its price target, according to BNP Paribas Investment Partners Ltd.

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Jim,

Ya ain’t workin, ya don’t count! Ya got 3 part-time jobs to try to replace your past good job. We count ya employed 3 times.

Can’t ya count?

Initial Jobless Claims Plunge To 42 Year Lows, Despite Surging Job Cuts
Submitted by Tyler Durden on 10/15/2015 08:35 -0400

The yawning gap between job cuts (surging most since 2009) and initial jobless claims (hovering near 42 year lows) continues to grow as initial jobless claims collapse 7k this week to 255k – the lowest since 1973. Bear in mind, Goldman’s explanation that jobless claims are useless in this part of the business cycle…”this does not signal a booming labor market.”

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Charts: Bloomberg

But as Goldman Sachs confirms… “this does not represent a booming labor market”

Although payroll employment growth has slowed in recent months, initial claims for unemployment insurance benefits remain very low. The four-week moving average of initial claims has trended lower again this year—despite meaningful layoffs in energy-producing states—and is currently at the lowest level since early 2000 (Exhibit 1). Does this mean that the current rate of nonfarm payroll growth understates the strength of the labor market?

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Jim,

Only in America!

CIGA Wolfgang Rech

Whistleblower Employed By Federal Whistleblower Protection Program Fired For Blowing The Whistle
Submitted by Tyler Durden on 10/15/2015 – 13:33

Here is what happened: a whistleblower who worked for the Federal Whistleblower Protection Program was fired for blowing the whistle on his employer: the very agency that was supposed to protect him.

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Jim,

The pain from the demise of the A&P grocery store chain will be greater than previously anticipated.

“As many as 13,000 A&P workers will lose their jobs by Thanksgiving Day as the 156-year-old grocer heads toward liquidation, The Post has learned.”

CIGA Joseph D

 

Hello Mr. Sinclair,

The Stasi-state is alive and well in the exceptional country. I posted the following paragraph on Yahoo this morning in response to an article published about Russia using missiles against ISIS targets. It got quite a bit of attention with plenty of “likes, thumbs-up,” then was promptly deleted:

“Somehow, some way this little skirmish is going to blow-up at incredible speed.  You see, NATO is whining about Russian air craft invading Turkish air-space.  At some point US/NATO fighter jets are going to scramble to intercept these air craft, but some “allied” pilot will be unaware that their craft is in “docile mode” (meaning unarmed, rigged for practice) resulting in the poor soul being blown right out of the sky.  Then you will hear “Did you see what those bad Russians just did?”  Welcome to WW III!”

I think I hit a nerve.

Hope you are well!
CIGA Matt

 

Jim,

This could not happen to a better company.

CIGA Joseph D

“(Reuters) – Monsanto Co, one of the world’s largest seed and agrichemical companies, said on Wednesday that it was slashing 2,600 jobs and restructuring operations to cut costs in a slumping economy.”