Thursday, June 21, 2012

Debt crisis: Spain and Italy to be bailed out in £600bn deal

Two rescue funds are to be used to buy the debts of the troubled economies, the cost of which have reached record highs in recent weeks.

It is hoped that the move, which represents a substantial shift in policy for Germany’s chancellor, Angela Merkel, will send a strong signal to financial markets that Europe’s biggest economy is finally prepared to back its weaker neighbours.

Mrs Merkel and other European leaders have come under intense pressure at this week’s G20 summit to take radical action to stem the growing euro crisis which has pushed up the cost of Spanish bonds to unsustainable levels.

The communiqué issued at the end of the G20 summit, which finished in Mexico last night, said that European leaders had agreed to take action to bring down borrowing rates. (more)

Ponzi Update: FED to Buy $267 Billion More in Treasuries by End of 2012

[Ed Note: The total value of all remaining physical silver on the planet is at best $56 Billion at current prices. And according to Ted Butler, it's more like $28 Billion... Are you starting to get the picture here?!]

by Maureen Farrell,

Bond yields are twisting much like they did last fall following the Federal Reserve’s announcement Wednesday that it is extending its so-called Operation Twist program — a widely anticipated move.

Under Operation Twist, which was introduced by the Fed last September, the central bank planned to buy Treasuries with maturities between 6 and 30 years before the end of June 2012 and sell the same amount with maturities of 3 years or less.

The move was designed to boost lending and lower longer-term interest rates.

On Wednesday, the Fed said that it will keep the program going “at the current pace,” with the aim of buying $267 billion worth of Treasuries by the end of 2012.

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Look Out Below! Major Crude Oil Crash Is Coming Says Analyst

Crude oil has fallen 20% in less than 2 months. The drop has been sufficient to prompt most bears to declare victory and cover their shorts or even ponder getting long near last year's lows in the mid-$70s. But Jeff Kennedy, chief commodity analyst at Elliott Wave International thinks those buyers are early by about $40.

He bases his outlook on pattern recognition and psychology. His work suggests crude will plunge to the December 2008 lows of $38 a barrel then pause prior to falling another 50%. All in, Kennedy is forecasting an additional 80% drop in crude to $16.70 a barrel; a level not seen since November 0f 2001.

As a technician Kennedy pays little heed to the standard crude narratives involving Middle East tensions, supply disruptions, and refining. To him the charts tell the story and "the story right now in the crude oil price chart argues for a further decline well into 2013."

One of the contributing factors for the drop in crude is strength in the dollar, particularly against the beleaguered Euro. The thesis for getting long dollars and shorting euros is simple: the Eurozone is perpetually on the brink of collapsing, taking its fake currency with it. Sometimes simple works.

Fundamentally, technically and in every other way Kennedy likes the dollar as a breakout play on the dollar index and a breakdown trade against the euro. You can quibble with his methodology but you can't accuse Kennedy of hedging his bets.

This "Hated" Natural Gas Stock Could Easily Double : CHK

The naysayers about the natural gas revolution are flat wrong. And they're especially wrong about one of the most important companies in this space. Those with the guts to call [1] them out and invest in the natural gas revolution stand to make a killing.

If you visit regularly, then you know I've called the natural gas revolution "The Biggest Story in Energy. [2]" And thanks to the financial crisis, the ensuing recession [3], and a glut of storage and supply during the past few years, natural gas prices are near historic lows.

But investors need to keep one thing in mind. Natural gas prices are starting to perk up, and the long term future for this commodity [4] (as a fuel for power, transportation and export) looks bright, leading me to recently announce that "Now is the Time to Invest in Natural Gas [5]."

There's just one problem: One of the heaviest-hitters in this space is caught in a firestorm of controversy. That's leading many investors to question whether this company is worth an investment.

Let me be clear: It is, without question. (more)

Gerald Celente – A War With Iran is Imminent – June 18, 2012

McAlvany Weekly Commentary

Michael Pettis on Tomorrow’s China

A Look At This Week’s Show:
-Globalization/liquidity cycle at the end
-Chinese households have paid for 20 yrs growth
-Without fiscal union, Euro will break up

About the Guest: Wall Street veteran, merchant banker, equities trader, economist, finance professor, entrepreneur — iconoclast — Michael Pettis is a unique individual living and working in China, at the heart of the world’s most exciting and vibrant economy. CLICK HERE TO READ MORE

A Major Crash in the Stock Market about to happen warns Harry Dent

Long-range economic forecaster Harry Dent, founder of economic advisory firm HS Dent and author of "The Great Crash Ahead," is calling for a market crash and he talks about the outlook for the U.S. economy. and Europe . Harry Dent has been following the world's boom and bust cycles for decades and is now predicting a great crash.Get out of stocks and bonds now look to re-invest later in 2014 when the stock market will bottom says Harry Dent .Harry S. Dent Jr. is one of the smartest, savviest economic researchers around, and his track record for being RIGHT when conventional wisdom has been wrong cannot be ignored. If you want to make sure you have all your financial bases covered in the months and years ahead, you owe it to yourself to hear what he has to say.

Dennis Gartman: Major Shift in Gold Trade

Dennis Gartman is widely followed for his keen understanding of commodities, especially gold. And he tells us the way he’s trading the precious metal has just changed.

“For the first time in a long time, I’d rather own the miners than bullion, or gold contracts or the GLD,” he says.

And that’s because Gartman, author of The Gartman Letter, has spotted a major shift in the gold trade.

“For the previous 4 to 5 years even as the spot price [GCCV1 1603.50 -19.70 (-1.21%) ] has climbed to new highs gold miners [GDX 47.68 -0.05 (-0.1%) ] have deteriorated,” he explains.

But no more.

“Over the past few weeks as the gold market advanced, the gold equities – that is, large cap gold miners – performed better than bullion,” he explains. “I watch that sort of thing to see how efficient and how well entrenched the gold rally is.”

The action suggests that although the better trade had been long the spot price of gold, it no longer is. Now miners are about to outperform and the better trade is long gold equities.

If all that's confusing, another way to say it is -- Gartman is now more bullish of gold miners, which can be played long the GDX [GDX 47.68 -0.05 (-0.1%) ], than the spot price itself.

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