Wednesday, September 16, 2009

U.S. stock market eyes investor cash still on the sidelines

The U.S. stock market, which on Wednesday finished higher for a third straight day, is benefiting in part by the belief that money now collecting dust in the observation deck will eventually find a home in equities.

"As you look at the cash-on-the-sidelines argument, it hypothetically represents pent-up demand for equities," said Art Hogan, chief market strategist at Jefferies & Co. U.S. money market fund assets most recently stood at $3.56 trillion, down from their March peak of $3.8 trillion, but still about double the amount of funds typically held, Hogan said. (more)

Celente on Russia Today - "Cover up, not Recovery"

KINGSTON NY, 15 September 2009 --Today commemorates the first anniversary of the greatest bankruptcy in American history, the collapse of Lehman Brothers, quickly followed by the biggest drop in stock prices since the Great Depression and a near-global market meltdown.

In December 2007, the Trends Journal predicted that an "Economic 9/11" would strike America in 2008. "Just as the Twin Towers collapsed from the top down, so too will the US economy ... when the high-stakes speculators, banks, brokerages and buyout firms that leveraged billions with millions get hit, everything underneath them will turn to rubble," we wrote.

Today also marks the anniversary of the onset of a sequence of major financial failures and subsequent government bailouts, buyouts, rescue packages and stimulus plans that -- in the course of a single year -- have reshaped the American free enterprise system.

Yesterday, President Obama visited Wall Street and admonished its players for the "reckless behavior and unchecked excess at the heart of the crisis." He credited his administration with pulling the country back from the brink. "We can be confident that the storms of the past two years are beginning to break," Obama said.

At the Trends Research Institute we are anything but "confident." What is ballyhooed as 'recovery' is nothing more than a cover-up; papering over historically unprecedented financial losses with historically unprecedented trillions of dollars spun out of thin air, backed by nothing, and producing practically nothing.

And while President Obama asserts that his policies signal a "return to normalcy," the Fed policy of flooding the market with phantom money -- meant to kick off another borrowing and spending spree -- is regarded by the global financial markets as neither normal nor healthy. Gold prices have broken through the $1000 ceiling. The dollar is at a yearly low against key currencies.

This is not the American media, Wall Street or Washington speaking, it's the world ... and the message is unmistakable; it is a global vote of "No Confidence." Gold doesn't lie.

The Autumn Trends Journal will be published at the end of September/early October. For a preview, see Gerald Celente's interview on Russia Today (filmed at The Trends Research Institute)where he discusses the Cover-up that masquerades as Recovery.

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Gold will hit $1,500: Sprott's Embry

Gold is holding near $1,000 US an ounce and John Embry, chief investment strategist at Sprott Asset Management says bullion's rally has legs. Find out why he predicts gold will hit $1,500.

watch clip here

U.S. credit card defaults up, signal consumer stress

Bank of America Corp and Citigroup Inc customers defaulted on their credit card debts in August at the highest rates since the onset of the recession, a sign that the banks' consumer lending woes are far from over.

The trend was echoed among most other major credit card issuers, dashing optimism sparked when many banks and specialty finance companies reported lower default rates for July.

"People have gotten very bullish with the July data, and (the August data) raises the question about how fast the consumer will get better," said Scott Valentin, an analyst at FBR Capital Markets. "People were assuming the pace would be pretty rapid, and this maybe slows the pace down." (more)

Gold at record high after Bernanke says recession is over

Gold futures climbed back above the $1,000-an-ounce mark to finish at a new record on Tuesday, after upbeat U.S. economic reports and as Federal Reserve Chairman Ben Bernanke said the recession is likely over.

However, he and other Fed officials reiterated views that unemployment will remain high and that the economy stay weak well into next year, fueling expectations that the central bank will continue to provide ample liquidity.

The front-month September gold contract ended up $5.10, or 0.5%, at $1,005.0 an ounce on the Comex division of the New York Mercantile Exchange. This marks the highest settlement for a nearby gold contract. The more active December contract rose $5.20, or 0.5%, to finish at $1,006.30 an ounce. (more)

Revolutionary discovery means world may not run out of crude

A team of scientists based at the Royal Institute of Technology in Sweden have made a "revolutionary" discovery about how hydrocarbon is formed, learning that animal and plant fossils are not necessary to form crude oil.
The discovery, the scientists say, means that the world will never run out of crude oil. Currently, theory states that crude oil is formed very slowly - over millions of years - from the remains of dead plants and animals. Buried under rock, over time the pressure and temperature of natural earth processes results in the creation of crude oil. But that theory is now old news, as the scientists, led by Vladimir Kutcherov, say they have proven that fossilized plants and animals are not needed to create hydrocarbons. (more)

Gold Expert: Sell, Sell, Sell???????

One of London’s leading gold experts has urged his clients to dump their gold and silver holdings.

John Reade, an analyst at UBS, told investors to erase all their positions until the latest upward price surge ends, Ambrose Evans-Pritchard writes in the London Telegraph. Last week, gold ran up to $1,011 an ounce, not far from 2008’s record high of $1,030.

Gold has climbed amid the dollar’s drop to a one-year low.

Reade says futures contracts on New York's Comex exchange are flashing warning signals. The Comex experienced a surge of 6.4 million ounces in net long contracts last week. Such jumps in the past have on average presaged a 5 percent drop in gold prices over the next month. (more)

Jay Taylor: Turning Hard Times into Good Times

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