Tuesday, July 21, 2009

Peter Grandich Update

The U.S. stock market is getting to a point where some bearish call spreads may be in order. My thinking is to use major indexes like the DJIA, S & P 500 and the like. I’m currently looking for the right option vehicles and of course the entry point so stay tuned.

I mentioned in my weekend update that I thought this time around gold could get above $940 and stay there. We got the first part right. A very good Comex floor source of mine says that for the first time in quite awhile, the locals think the shorts could see this market get away from them. They feel this can occur if we can close above $950 or so at weeks-end. I concur so stay tuned. If only that commodity newsletter guy with the awful gold record didn’t go long. Hey, even a blind squirrel can find a nut now and then. (more)

Ted Butler on market manipulation, where the economy is headed and why silver is a screaming buy

Daily Bell: Thanks for sitting down with us. You are truly a legend in the field of silver and silver investing.

Butler: Those are some very kind words, so thank you. I just hope I can live up to them in this interview.

Daily Bell: The economic crisis is grave and getting graver. Give us a high-altitude overview of how the current economic situation affects silver - and how silver as a money metal might benefit in terms of price and popularity.

Butler: You are correct, these are certainly the most severe economic conditions I have ever witnessed. But whether we sink or swim economically, silver looks positioned to prevail better than any other asset I can think of. That's because of its dual-role, as a vital industrial material and as a primary investment asset. (more)

Marc Faber On CNBC

Marc Faber appeared on CNBC on July 16,2009. Marc Faber is expecting an “ultimate crisis” that will “clean the system.

“If you pump money into the system and you create large fiscal deficits, you create volatility,” Faber said.

“We’ve seen an intermediate low in March, we’ll rally for a year or so or maybe 18 months… the ultimate crisis will happen much later, and the ultimate crisis would clean the system,” (more)

Understand Dark Pools

What’s Good About More New Homes?

In America this week, the housing market rejoices: Housing starts climbed an unexpected 3.6% in June. According to the latest from the Commerce Department, builders broke ground on new homes at an annual rate of 582,000 in June, well above the Street’s expectations and the “best” month for housing starts since November. Curiously, single-family homes led the way, with a 14% building boom from the month before. That’s the biggest one-month gain since 2004.

Of course, this is a “signal that the housing market was improving” in June, as The New York Times suggests. But we dug up a longer-term chart of housing starts this morning that didn’t inspire as much confidence. Starts may have come up from the deep blue abyss, but we’re yet to emerge from uncharted waters. (more)

Imminent Erosion of USDollar Seawall

The globe is losing patience with leadership and management of the USGovt ship at sea. They simple refuse to offer a credible solution to the primary keynote crack in the hull, falling housing prices and cratered mortgages, each of which work their destructive magic to wreck the banks. The home loan modifications are a farce, a travesty not designed to modify but rather to frame a series of loan forbearances. The motive for not fixing the mortgage mess is mysterious to the masses, but not here. Jackass claims have been consistent, that effective loan modifications would alter the underlying mortgage bonds drastically. The Powerz wanted enough time delay to rejigger as many mortgage bonds as possible into new securities, thus rendering impossible any legal challenges to the original mortgage package process that was loaded with fraud to the hilt. Any drastic alteration of mortgage bonds would reveal vast fraud of two types. Many mortgage bonds did not have clearly certificate property titles with careful registrations. And then the coyote ugly part, that many mortgage bonds were simply counterfeits sold into a frenzy filled credit market designed to process the most vile vermin on paper. The USDollar is vulnerable here and now, as a new wave of bank losses is imminent from numerous types of mortgages along with some basic types. Let’s see if the grapevine is correct, that the USDollar will begin to see a trashing initiative starting this weekend, out of Asia. (more)

Rogers: America Bordering on Communism

Swiss banks running out of storage space for gold bullion

In a note entitled No more space for Gold Bars, Swiss news website 20 Minuten Online reports that Swiss banks are running out of secure storage space for gold bullion held by investors and institutions. Fears of hyperinflation, the economic downturn and the success of gold index funds (ETFs), which are supported by physical gold, has led to a run on precious metals investment - and in gold in particular, and in the necessary secure storage space in which to hold it..

One Swiss bank, earlier this year, reported that it was having to relocate some of its stored silver bullion to another site to make room for gold. The Zurich Kantonal bank put this down to the success of its gold ETF. (more)