We have consistently been making the contrarian call for a falling silver price and a rising gold to silver ratio for years. This ratio has risen a lot during this time. So are we ready to change our call yet?
Review of Our Call in 2015
Headline hockey continues in the energy complex as earlier confirmation of a pending OPEC meeting possible in February has seen more color added, via Reuters, that Saudi Arabia made a proposal that OPEC members cut production by a maximum of 5%. There remains confusion however as Bloomberg reports simply that Russian energy minister has said they "may discuss it," as opposed to being a specific proposal.
Reuters seems confident that The House of Saud has backed down and prosposed the cut...
Durable Goods Orders crashed 5.1% MoM and turned back negative YoY and ex-transports continues to deteriorate YoY flashing if nothing else a recessionary environment is upon us (if not an actual recession). However, it is in the core - non-defense ex-aircraaft - segemnt that we see the real bloodbath as shipments plunged and new orders collapsed 7.5% YoY - the "worst since Lehman." Of course we still have bartenders and waitresses to maintain the US economy so this is just transitory weakness in the stock market's most-dependent segment of the economy.
Submitted by Nicholas Colas of Convergex
Three Fed Thoughts, One Conclusion
As we do every quarter, just before CAT announces its result, we show the monthly retail sales for the heavy industrial conglomerate, and in the month of December things went from really bad to even worse, when the company reported what in our estimate was the worst month since the financial crisis, with global retail sales matching the worst annual decline this decade, while the duration of the sales contraction is now unprecedented in company history.