Monday, May 31, 2010
The Property Tax: Unsung Hero
It is not news that state tax revenues have been absolutely hammered in the current economic downturn. But you may be surprised to learn that one local tax has held up relatively well. It is, of all things, the property tax. How can that be, you ask, if so much of the economic mess was caused by a collapse of a housing bubble?
Last week a
Technically Precious with Merv, May 28, 2010
FREE weekly precious metal investment newsletter, click here
Good Moon/Bad Moon
Got a pet theory going into the open of trading in the US market today - which came through with a screaming 284 point advance on the Dow yesterday which was even better than the 200-I was expecting. The theory goes like this: People are crazy around the full moon. In fact, I think it was Steve Puetz who first noticed the effect.
Let me quote from a June 2001 article from internetnews.com:
"Several years back, a cycle watcher named Steve Puetz attempted to see if eclipses and market crashes were somehow related. He studied eight of the greatest crashes in financial history, from the Holland Tulip Mania of 1637 to the Nikkei of 1990. He found that market crashes tend to occur near full moons, and that the greatest number of crashes start after the first full moon after a solar eclipse, when that full moon is also a lunar eclipse. Puetz found that all eight crashes occurred six days before to three days after a full moon that occurred within six weeks of a solar eclipse. The odds of that being a coincidence, Puetz calculated, are less than 1 in 127,000."
The rest of this Paul Shread article is a must-read if you're not familiar with Puetz work.
About here, you may be asking yourself "With the futures up, and everything looking rosy again, why would old Gloomster George dredge up a story out of 2001 for me to read?"
Assuming you don't have your Celestecomp V (or StarPilot) handheld navigation computer fired up for your sunrise sun shots to see if your home is where it should be, here's the deal: The NASA Eclipse web site says we have a total solar eclipse coming up on July 11th.
And that means the next full moon after July 11th will come July 26th. But while it may be tempting to sit on the sidelines until then, there's also some correlation between madness and full moons which is why - at the peak of the market today - or near it as I can time things, I will go 'all in' with the few "play dollars" I have in paper assets.
Since I'll be playing either very long expiration (2011) put options on selected financial stocks, or the triple bear financial stock ETF, I'll have plenty of time to watch and wait.
If Ben Bernanke and Tim Geithner can print money, I figure George can, too. And this is how I plan to do it.
CAVEAT: This is not financial advise: I'm a wild-eyed, hard drinkin, cussin', no good, steel-for-guts, options player with more losses than sense. But when I have gains? Well, they've been pretty good. George Ure at Urbansurvival
Saturday, May 29, 2010
Bond Sales Fall to Least in Decade, Yields Soar: Credit Markets
Companies sold the least amount of bonds in a decade this month as concern Europe’s sovereign debt crisis will slow the global economy drove up relative borrowing costs by the most since the aftermath of Lehman Brothers Holdings Inc.’s collapse.
Borrowers issued $66.1 billion of debt in currencies from dollars to yen, a third of April’s tally and the least since December 2000, according to data compiled by Bloomberg. At least 14 companies withdrew offerings, including New York-based retailer Jones Apparel Group Inc. and theater chain operator Regal Entertainment Group. (more)
Will The USD Be Replaced By The SDR Or The CNY As The Next Reserve Currency?
Jim O'Neill, who did not make any friends within the bear community earlier today, has written an interesting paper on the IMF's Special Drawing Rights, and whether this hypernational currency can ever become a reserve currency as is, and/or with the CNY as a constituent member. While O'Neill as usual focuses on the angle of the "next paradigm" BRICs, and how they will increasingly dominate global economics, he does pose an important question: with the dollar likely to suffer the side effects of either hyperdeflation, hyperinflation, or hyperstagflation, will the next reserve currency be a diluted melange of other flawed fiat constructs (i.e., the SDR), or the currency of the one country, which for all its flaws, still has the cleanest balance sheet backing its own fiat construct. On the other hand, the question of whether this analysis is moot to begin with, and the world will revert to the gold standard as the ongoing crisis of confidence in all paper money flares up, is not raised even once... We wonder (not really) what Jim O'Neill would have to say on that particular issue. (more)
U.S. Stocks, Oil, Euro Tumble; Dow Ends Worst May Since 1940
U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.
The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273. (more)
The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273. (more)
Friday's Analytical Charts for Gold, Silver and Platinum
As a Kitco News exclusive, seasoned analyst, Jim Wyckoff will be providing technical charts on a daily basis. Today, Jim focuses in on Gold, Silver and Platinum. Get ready to sharpen your trading skills with these useful tools as Jim brings it to you....Tecnically Speaking. (more)
Canada won't fall victim to foreclosure wave: Report
Canada's housing market is expected to cool off this year and next, but isn't at risk of falling victim to a U.S.-style foreclosure crisis anytime soon, according to a new report by debt-rating firm DBRS Ltd.
DBRS said in the report that Canada will continue to fare well in comparison to its neighbour to the south when the Canadian housing market corrects itself and interest rates are tightened. That is because lending practices here are much more sound than in the U.S. (more)
Friday, May 28, 2010
Hyperinflation Guaranteed
The latest EU and IMF package of $1 TRILLION (Euro 750 billion) is yet another futile attempt by governments to abolish poverty by printing paper. Let’s be absolutely clear, this money does not exist and the EU governments are hoping by declaring such a large amount that they can con the Wolfpack speculators. At this point the EU has just picked a large round figure out of the air. But when their bluff is called by the Wolfpack and the next attack happens, EU governments will after initial huffing and puffing start printing unlimited amounts of paper.
So the world is now on its road to ruin and there is no action, no leader and no new amount of printed money that can save the world or prevent a hyperinflationary depression. (more)
Jason Hommel: Ten Topics on Silver
Usury.
Lending at interest (usury) is the bane of our era, the highest crime of the ages, condemned by prophets, regulated by God, and ignored by modern man. God said no usury, unless you loan to other nations, but every seventh year is supposed to be a time of debt forgiveness, thus, it's a plan to teach the nations about God, yet abused instead to enslave people into perpetual bondage. Usurers want the whole earth, plus 6%! Lending is not so much a problem as is the interest! When gold is money, gold grows more valuable over time, so "increase" is built in!
The Big Picture for Silver.
No nation on earth uses silver or gold as a circulating medium of exchange, or common currency. (more)
What recession? Mining equipment is sold out until next year
Metal prices have made spectacular rebounds since the start of the year on growing optimism about the world economy. It's not even midway through 2010 and Caterpillar (CAT, Fortune 500) has sold out of some of its largest mining vehicles because of rising commodity prices, and is now taking orders for 2011 delivery.But the upward momentum has suddenly slowed. Though metals recovered some of their value this week, prices have generally dropped for the past several weeks due to uncertainties over the yuan in China and sovereign debt in Greece and throughout Europe. (more)
The Gold & Silver Precious Metals Correction
It's been an exciting week for traders as volatility levels are through the roof and the broad market is moving up and down like a yoyo. You cannot take your eyes off the screen if you have a large amount of money invested as you can quickly find yourself with a large profit or loss in the matter of minutes… Although we have seen stocks jump around the past few days precious metals have held strong with very little volatility. This is because of the economic fears looming for the US and other countries of possible financial collapse. This fear is helping to boost gold and silver prices because they are seen as the safe haven. Also we are seeing money move in the US dollar because the country is still seen as a leader in many ways helping to boost the US dollar. (more)
Goldman’s O’Neill: Euro Will Soar 10 Percent This Year
The euro’s recent plunge to a four-year low was overdone, says Goldman Sachs chief economist Jim O’Neill.
He forecasts the currency will appreciate by about 10 percent, to $1.35, in the next three to six months, as investors come to realize the United States has a debt crisis just like Europe.
All the talk about the euro quickly dropping to $1 is unrealistic, O’Neill says.
“That’s 21 to 22 percent away. That’s huge move,” he told Bloomberg. (more)
He forecasts the currency will appreciate by about 10 percent, to $1.35, in the next three to six months, as investors come to realize the United States has a debt crisis just like Europe.
All the talk about the euro quickly dropping to $1 is unrealistic, O’Neill says.
“That’s 21 to 22 percent away. That’s huge move,” he told Bloomberg. (more)
Barton Biggs: Dow to Soar So High It Will Make Us Squirm
Contrarian investor Barton Biggs, whose flagship fund returned three times the industry average last year, says the U.S. stock market is very, very oversold and is poised to take off.
“I think we’re going to have a big pop to the upside in the next couple of days,” Biggs says.
“I wouldn’t be surprised to see us go to a new recovery high, just to make everybody squirm,” he says.
“I think [stocks are] going to stabilize in this general area, and then we’re going to have a significant move to the upside,” he told Bloomberg. (more)
“I think we’re going to have a big pop to the upside in the next couple of days,” Biggs says.
“I wouldn’t be surprised to see us go to a new recovery high, just to make everybody squirm,” he says.
“I think [stocks are] going to stabilize in this general area, and then we’re going to have a significant move to the upside,” he told Bloomberg. (more)
National Debt Soars Past $13 Trillion
The U.S. national debt has passed the $13 trillion mark, according to USDebtClock.org, an independent website that tracks the real-time growth of U.S. revenues and spending.
On Tuesday, the national debt stood at $12,995,779,490,444.52, according to the Treasury Department's national debt-tracking website TreasuryDirect.gov.
The Treasury Department did not immediately return a request from ABC News for comment.
Senate Minority Leader Mitch McConnell , R-Ky., wasted no time in sounding an alarm about the new debt milestone. In a statement released today, McConnell cited the debt in his criticism of what's called the tax extenders bill, which would extend unemployment benefits and the amount of time unemployed workers could stay on their group health plan through COBRA, as well as certain tax cuts. McConnell said the bill would cost $130 billion. (more)
Is Europe heading for a meltdown?
Mervyn King, the Bank of England Governor, summed it up best: "Dealing with a banking crisis was difficult enough," he said the other week, "but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there's no backstop."
In other words, were this a computer game, the politicians would be down to their last life. Any mistake now and it really is Game Over. Or to pick a slightly more traditional game, it is rather like a session of pass-the-parcel which is fast approaching the end of the line. (more)
Fiat Money Supply Contracting at Great Depression Level
The bankster operative who helped destroy Glass-Steagall is back.
Larry Summers, Obama’s top economic adviser, has told Congress to “grit its teeth” and approve a fresh fiscal boost of $200 billion to keep growth on track, reports the Daily Telegraph. “We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on,” he said.
The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the stimulus boondoggle. (more)
Thursday, May 27, 2010
McAlvany Weekly Commentary, May 26, 2010
John Allison: Former Bank Chairman and CEO on Recent Financial Reform
Posted on 26 May 2010.
Mr. Allison, 61, served as the Chairman of BB&T Corporation from 1989 to December 2009 and the Chief Executive Officer of BB&T Corporation and Chairman and Chief Executive Officer of Branch Bank from 1989 to December 2008. As the previous Chairman and Chief Executive Officer of BB&T, Mr. Allison brings deep institutional knowledge and perspective regarding BB&T?s strengths, challenges and opportunities. He possesses extensive public company and financial services industry experience. Mr. Allison also is actively involved in educational and community organizations. He currently serves on the Wake Forest University Baptist Medical Center Board of Visitors, the Board of Visitors for the Center for Organizational Leadership and Ethics at The Fuqua School of Business at Duke University, and the Kenan-Flagler Business School at UNC-Chapel Hill. He is a past member of the Board of Directors of The Financial Services Roundtable and The Clearing House. Mr. Allison was recognized by the Havard Business Review as one of the world?s top 10 CEO?s over the last 10 years. In addition, Mr. Allison recently was awarded the American Banker Lifetime Achievement Award for 2009 and inducted into the North Carolina Business Hall of Fame for his significant contributions to BB&T and the financial services industry. Mr. Allison currently serves as a Distinguished Professor of Practice on the faculty of the Wake Forest University School of Business.
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OECD paints glowing picture of Canadian economy
The North American economy is leading a stronger-than-expected rebound in growth among western countries, though serious risks remain in the global economy due to the Europe-centred debt crisis and overheating in emerging market economies, a Paris-based think-tank warned here Wednesday.
The Canadian economy is particularly strong this year, aided by a healthy banking sector and low government deficits relative to its competitors, according to the Organization for Economic Co-operation and Development. (more)
Bond Distress Highest Since ’09 as Sales Vanish: Credit Markets
The percentage of corporate bonds considered in distress surged this week to the highest since 2009 as investors dumped debt of the neediest borrowers on concern that Europe’s fiscal crisis may make it harder for them to refinance.
Some 17 percent of junk bonds yield at least 10 percentage points more than Treasuries, up from 9.2 percent last month, Bank of America Merrill Lynch’s Global High-Yield Index shows. The jump is the biggest since the distress ratio rose 11 percentage points in November 2008, two months after Lehman Brothers Holdings Inc. collapsed. Bonds of MGM Mirage and Freescale Semiconductor Inc. joined the list in May. (more)
Barton Biggs Says Stock Market Set to ‘Pop’ in Days
U.S. stock markets are oversold and may rally strongly over the next few days, said investor Barton Biggs.
“I think they’re going to stabilize in this general area, and then we’re going to have a significant move to the upside,” Biggs, who runs New York-based hedge fund Traxis Partners LP and whose flagship fund returned three times the industry average last year, said in a Bloomberg Television interview.
The Standard & Poor’s 500 Index is down 10 percent in May, poised for its worst month since February 2009, as credit- ratings downgrades of Greece, Portugal and Spain added to concern some European nations will struggle to fund deficits.
“The market is very, very oversold, and I think we’re going to have a big pop to the upside some time in the next couple of days,” said Biggs. “I wouldn’t be surprised to see us go to a new recovery high, just to make everybody squirm.” (more)
Moody's: US AAA Rating at Risk
The United States' AAA rating continues to be stable, even though the government's finances have weakened from the cost of supporting the country's financial system and economy, Moody's Investors Service said.
The U.S.'s top rating could eventually come under pressure unless additional measures are taken to reduce projected record budget deficits, the agency warned.
The rating is backed by the country's ranking as the world's largest economy as well as its flexible markets and open trade regime, Moody's said in a statement that was worded similarly to other regular statements made in recent months.
A stable outlook indicates the rating agency views the AAA rating as unlikely to come under pressure over the next 12 to 18 months. (more)
The U.S.'s top rating could eventually come under pressure unless additional measures are taken to reduce projected record budget deficits, the agency warned.
The rating is backed by the country's ranking as the world's largest economy as well as its flexible markets and open trade regime, Moody's said in a statement that was worded similarly to other regular statements made in recent months.
A stable outlook indicates the rating agency views the AAA rating as unlikely to come under pressure over the next 12 to 18 months. (more)
Evans-Pritchard: Gold Could Hit $3,000
The global debt crisis could send gold up to $3,000 an ounce, says Ambrose Evans-Pritchard, international business editor of London’s Daily Telegraph.
Evans-Pritchard warned early on of the looming collapse in credit and the subsequent financial crisis and multiple global recessions. His entire interview will appear in the July issue of Financial Intelligence Report.
“I have always liked gold,” Evans-Pritchard told Newsmax.TV Money.
“I liked it a lot when it was $260 an ounce eight to nine years ago, but now it is over $1,200 an ounce.” (more)
Evans-Pritchard warned early on of the looming collapse in credit and the subsequent financial crisis and multiple global recessions. His entire interview will appear in the July issue of Financial Intelligence Report.
“I have always liked gold,” Evans-Pritchard told Newsmax.TV Money.
“I liked it a lot when it was $260 an ounce eight to nine years ago, but now it is over $1,200 an ounce.” (more)
25 Predictions For The Rest Of 2010
- Bob Chapman
- First 6 months of 2010, Americans will continue to live in the 'unreality'the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications (source is from insider at FED meetings). In the last quarter of the year we could even see Martial law, which is more likely for the first 6 months of 2011. The FDIC will collapse in September 2010. Commercial real estate is set to implode in 2010. Wall Streetbelieves there is a 100% chance of crash in bond market, especially municipals sometime during 2010. The dollar will be devalued by the end of 2010.
- Gerald Celente
- Terrorist attacks and the "Crash of 2010". 40% devaluation at first = the greatest depression, worse than the Great Depression. (more)
Moody’s Reiterates U.S. Spending Risks Credit Rating
The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.
The U.S. retains its top rating for now because of a “high degree of economic and institutional strength,” the New York- based ratings company said in a statement today that was little changed from a credit opinion released in February. The outlook is stable, the statement said.
The government’s finances have been “substantially worsened by the credit crisis, recession, and government spending to address these shocks,” Moody’s analysts lead by Steven A. Hess wrote. “The ratios of general government debt to GDP and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries.” (more)
Secret Clause Reveals Europe Bailout Designed To Destroy Global Economy
A secret exit clause written into the trillion dollar European bailout agreement will ensure the creation of more debt in Europe, worsening the global economy, decimating nation states and allowing power to be consolidated into fewer super-elite hands. As the Financial Times reports today, the major German newspaper Bild says it has obtained a copy of the bailout agreement and has set about “exposing” a series of secret clauses. (more)
Wednesday, May 26, 2010
Hugo Salinas-Price on the Nature of Money and Why Silver Should Be Legal Mexican Currency
The Daily Bell is pleased to present an exclusive interview with Hugo Salinas-Price (left).
Introduction: Hugo Salinas Price, 75, is a successful, retired businessman who lives in Mexico. He has been a follower of the Austrian School of Economics since his youth. He has written three books in Spanish on how and why silver should be instituted as money in Mexico, in parallel with paper money, and numerous related articles in English and Spanish, posted at his website. His organization, the Mexican Civic Association Pro Silver, is actively lobbying the Mexican Congress to approve legislation, which will institute the pure silver "Libertad" ounce as money.
Daily Bell: What is your campaign in Mexico for sound financial policy?
Hugo Salinas-Price: I actually avoid discussing "sound financial policy" because one can argue about that till the cows come home. During the last fifteen years I have devoted my efforts to one single aim, and that is to achieve the monetization of a silver ounce coin currently minted by our Central Bank. This coin has no engraved monetary value and is called the "Libertad" coin; it can very easily be turned into a monetary coin, that is to say, a coin with a monetary value. As such, anyone owning such a coin could, if he or she wished, be able to pay any bill or debt denominated in Mexican pesos. (more)
Money Manager Manduca: Buy Euro, Pound Now Amid the Global Panic
Panic among investors has pushed the euro and pound to oversold levels, says Philip Manduca, head of investment for The ECU Group currency managers in London.
With the euro having dropped to a four-year low beneath $1.23, that area is a good spot to buy the currency, he says.
“The news is overblown to the downside,” Manduca said.
“We don’t think that the euro is going to fall apart. The political will in Europe remains paramount and is being discounted by foreign exchange operators,” he told Bloomberg. (more)
The Global Economic Crisis, The Great Depression of the XXI Century
In all major regions of the world, the economic recession is deep-seated, resulting in mass unemployment, the collapse of state social programs and the impoverishment of millions of people. The economic crisis is accompanied by a worldwide process of militarization, a "war without borders" led by the United States of America and its NATO allies. The conduct of the Pentagon’s "long war" is intimately related to the restructuring of the global economy. We are not dealing with a narrowly defined economic crisis or recession. The global financial architecture sustains strategic and national security objectives. In turn, the U.S.-NATO military agenda serves to endorse a powerful business elite which relentlessly overshadows and undermines the functions of civilian government. (more)
Volatility Index 20 Year Chart
Given today’s volatility — we gapped down 2.5%, now are climbing to minus 1.5% – today’s lunchtime chart is this fascinating look at the long term history of the VIX, below As you can see, the Volatility Index is now above the levels it hit during the Bear Stearns collapse, Fannie & Freddie’s Fall, and Morgan Stanley’s wobble. It is near levels reached during the Asian Contagion, LTCM, and 9/11. The VIX remains far below the Lehman/AIG collapse.
Why silver could soon take off
Silver remains the preserve of relatively few contrarian investors. The media and financial press rarely covers it, and yet it is in the intermediate stage of a bull market that may rival that of the 1970s.
The primary reason for this is the continuing and increasing global macroeconomic, currency and geopolitical risks; silver’s historic role as money and a store of value; its declining and very small supply; significant industrial demand and - perhaps most importantly - significant and increasing investment demand. (more)
Going Long, Going Deep, Going Broke: ZIRP and the Imploding Speculative Economy
A slow-growth real economy has been replaced with a credit-based speculative financial economy dependent on low interest rates and systemic fraud to survive. It is now imploding on a global scale.
Governments around the world have attempted to replace the real economy of value produced with a financial model based on credit growth and speculation. They have failed, and their constructs are imploding before our eyes.
I am going to cover a lot of ground here so load up on your stimulus of choice (ginseng, coffee, lime juice, etc.) and stay sharp. (more)
Tuesday, May 25, 2010
Technically Precious with Merv, May 21, 2010
FREE weekly precious metal investment newsletter, click here
Apprenticed Investor: The Zen of Trading
So far the Apprenticed Investor series has discussed a lot of don'ts. Don't do this, don't do that; avoid talking to these kinds of traders; don't say or think these kinds of things.
Well, it's time to shift gears, and since trading is an active enterprise, I'll discuss some things you should do. I plan to expand on these ideas significantly in future episodes.
Well, it's time to shift gears, and since trading is an active enterprise, I'll discuss some things you should do. I plan to expand on these ideas significantly in future episodes.
Taken together, the following 10 rules will not only help you with the philosophical grounding necessary for thoughtful -- and successful -- investing, they will help you avoid some of the more common mistakes made by investors and traders early in their careers.
This is the "Zen of Trading;" It is more than an overview -- it's an investment philosophy that can help you develop an investing framework of your own.(more)
Whitworth Says VIX Shows Equities ‘Not Out of Woods’
U.S. stock market volatility that surged to the highest level since March 2009 may persist as Europe’s debt crisis defies resolution, Relational Investors LLC’s Ralph Whitworth said.
The options-market gauge known as the VIX jumped 28 percent to 40.10 last week, extending its increase since April 12 to 157 percent, according to data compiled by Bloomberg. The index shows investors are paying more to protect against stock declines as governments seek to reduce deficits in Greece, Portugal and Spain. The Standard & Poor’s 500 Index is down 9.5 percent for May, poised for the biggest decline in 15 months.
“Volatility sent a strong message that we’re not out of the woods globally,” said Whitworth, who helps oversee $6.5 billion at San Diego-based Relational Investors. “I expect the modest recovery that’s under way to have resilience, with the major caveat being a big blowup in Europe. That could spread like an infection.” (more)
JP Morgan: Gold May Face 'Unlimited' Demand
Investor appetite for gold appears to be booming as prices have crept upward, says John Bridges, a JP Morgan analyst.
The precious metal could yield a large demand as fears of the euro and the dollar weakening continue, Bridges said in the report, according to the Business Insider.
Gold recently traded at $1195.50.
“A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited," Bridges said in the report. (more)
The precious metal could yield a large demand as fears of the euro and the dollar weakening continue, Bridges said in the report, according to the Business Insider.
Gold recently traded at $1195.50.
“A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited," Bridges said in the report. (more)
Hedge funds bet big on the falling euro
Hedge funds, including Hayman Advisers and Matrix Group, have told investors that they expect the sovereign debt crisis to worsen despite the €110bn (£79bn) bail-out by the International Monetary Fund, the European Union and the European Central Bank.
Anxiety about the financial health of Europe increased yesterday after Spain’s national bank was forced to take control of CajaSur, a savings bank ridden with distressed property debt, after a rescue merger with a rival collapsed. (more)
Fact vs. Fiction on Today’s Economy
There is a lot of “noise” being tossed out by the politicos and their preferred pundits about how the U.S. economy is on the mend. Thus it is important to try and separate fact from fiction about where things really stand.
FICTION: Though sporadic, the U.S. economy will continue to improve.
FACT: The U.S. is headed for a currency crisis.
While having learned to cover their butts by adding some modest modifiers to their generally rosy forecasts, the administration’s shills (Geithner, Bernanke, Summers, et al.) are unified in telling us that the worst is over.
The fact is that the U.S., nay, the world, is headed for fiat currency crash. Let me push forward some evidence in support of that contention. (more)
Burden of Irish debt could yet eclipse that of Greece
OPINION: What will sink us, unfortunately but inevitably, are the huge costs of the September 2008 bank bailout, writes MORGAN KELLY
IT IS no longer a question of whether Ireland will go bust, but when. Unlike Greece, our woes do not stem from government debt, but instead from the government’s open-ended guarantee to cover the losses of the banking system out of its citizens’ wallets.
Even under the most optimistic assumptions about government spending cuts and bank losses, by 2012 Ireland will have a worse ratio of debt to national income than the one that is sinking Greece. (more)
Monday, May 24, 2010
Comments On This Week’s COT Data
For the past two weeks I have been observing a divergence from what has been a fairly reliable pattern involving the Swap Dealers and the big Commercials (Producer/User/Merchant/Processor) category. I remarked about this last week in my comments and mentioned that we would be watching to see if this divergence looks like it might be more than perhaps a one or two hit wonder.
This week’s report now shows the 3rd consecutive week in which the Swap Dealers have gone the opposite direction of the other big commercials. What makes this so noteworthy is that by simply looking over the chart, you can see that for the most part these two giants have been pretty much marching in lock step with each other. As the net short commercial position increases, the swap dealer net short position generally increases as well. When it decreases, so too does the Swap Dealer’s. (more)
Apprenticed Investor: Six Keys to Stock Selection
So far, Apprenticed Investor has dealt with a lot of theory. We've discussed how emotions lead to bad decision making, and why you should stick to your plan. But I know what you really want: some advice on how to select stocks. That's our goal today.
The idea is not to pick stocks for you, but to help you develop a methodology for selecting stocks -- a set of tools, a checklist of sorts, to help determine whether a given stock is worthy of your attention.
The idea is not to pick stocks for you, but to help you develop a methodology for selecting stocks -- a set of tools, a checklist of sorts, to help determine whether a given stock is worthy of your attention.
One caveat: We are not addressing whether you should be a buyer of stocks today. Our discussion assumes your asset allocation is appropriate, and that the market is not in a high-risk, low-return territory. I'll address each of those concerns in a future column. (more)
Six Trends Converging to Destroy the Planet
If you’re not tired already of hearing the phrase “perfect storm” bantered around with reckless abandon… a recent piece, “The Perfect Storm: Six Trends Converging on Collapse” could be just up your alley. Despite the unfortunate title, it’s the kind of article you’d expect to cover the global selloff, collapse of the euro, and so forth. Fortunately it’s not. It’s all the other forces bent on destroying the world, and it’s actually worth a look. Below is a short highlight from each of the six top trends.
From The Huffington Post: (more)
Military Coup Against Obama?????
Full Text Of Newsmax Column Suggesting Military Coup Against Obama
Here is the full text of John L. Perry's column on Newsmax which suggests that a military coup to "resolve the Obama problem" is becoming more possible and is not "unrealistic." Perry also writes that a coup, while not "ideal," may be preferable to "Obama's radical ideal" -- and would "restore and defend the Constitution." Newsmax has since removed the column from its website.
Obama Risks a Domestic Military Intervention
By: John L. Perry
There is a remote, although gaining, possibility America's military will intervene as a last resort to resolve the "Obama problem." Don't dismiss it as unrealistic.
America isn't the Third World. If a military coup does occur here it will be civilized. That it has never happened doesn't mean it wont. Describing what may be afoot is not to advocate it. So, view the following through military eyes:
# Officers swear to "support and defend the Constitution of the United States against all enemies, foreign and domestic." Unlike enlisted personnel, they do not swear to "obey the orders of the president of the United States."
# Top military officers can see the Constitution they are sworn to defend being trampled as American institutions and enterprises are nationalized.
# They can see that Americans are increasingly alarmed that this nation, under President Barack Obama, may not even be recognizable as America by the 2012 election, in which he will surely seek continuation in office.
# They can see that the economy -- ravaged by deficits, taxes, unemployment, and impending inflation -- is financially reliant on foreign lender governments.
# They can see this president waging undeclared war on the intelligence community, without whose rigorous and independent functions the armed services are rendered blind in an ever-more hostile world overseas and at home.
# They can see the dismantling of defenses against missiles targeted at this nation by avowed enemies, even as America's troop strength is allowed to sag.
# They can see the horror of major warfare erupting simultaneously in two, and possibly three, far-flung theaters before America can react in time.
# They can see the nation's safety and their own military establishments and honor placed in jeopardy as never before.
So, if you are one of those observant military professionals, what do you do?
Wait until this president bungles into losing the war in Afghanistan, and Pakistan's arsenal of nuclear bombs falls into the hands of militant Islam?
Wait until Israel is forced to launch air strikes on Iran's nuclear-bomb plants, and the Middle East explodes, destabilizing or subjugating the Free World?
What happens if the generals Obama sent to win the Afghan war are told by this president (who now says, "I'm not interested in victory") that they will be denied troops they must have to win? Do they follow orders they cannot carry out, consistent with their oath of duty? Do they resign en masse?
Or do they soldier on, hoping the 2010 congressional elections will reverse the situation? Do they dare gamble the national survival on such political whims?
Anyone who imagines that those thoughts are not weighing heavily on the intellect and conscience of America's military leadership is lost in a fool's fog.
Will the day come when patriotic general and flag officers sit down with the president, or with those who control him, and work out the national equivalent of a "family intervention," with some form of limited, shared responsibility?
Imagine a bloodless coup to restore and defend the Constitution through an interim administration that would do the serious business of governing and defending the nation. Skilled, military-trained, nation-builders would replace accountability-challenged, radical-left commissars. Having bonded with his twin teleprompters, the president would be detailed for ceremonial speech-making.
Military intervention is what Obama's exponentially accelerating agenda for "fundamental change" toward a Marxist state is inviting upon America. A coup is not an ideal option, but Obama's radical ideal is not acceptable or reversible.
Unthinkable? Then think up an alternative, non-violent solution to the Obama problem. Just don't shrug and say, "We can always worry about that later."
In the 2008 election, that was the wistful, self-indulgent, indifferent reliance on abnegation of personal responsibility that has sunk the nation into this morass.
Here is the full text of John L. Perry's column on Newsmax which suggests that a military coup to "resolve the Obama problem" is becoming more possible and is not "unrealistic." Perry also writes that a coup, while not "ideal," may be preferable to "Obama's radical ideal" -- and would "restore and defend the Constitution." Newsmax has since removed the column from its website.
Obama Risks a Domestic Military Intervention
By: John L. Perry
There is a remote, although gaining, possibility America's military will intervene as a last resort to resolve the "Obama problem." Don't dismiss it as unrealistic.
America isn't the Third World. If a military coup does occur here it will be civilized. That it has never happened doesn't mean it wont. Describing what may be afoot is not to advocate it. So, view the following through military eyes:
# Officers swear to "support and defend the Constitution of the United States against all enemies, foreign and domestic." Unlike enlisted personnel, they do not swear to "obey the orders of the president of the United States."
# Top military officers can see the Constitution they are sworn to defend being trampled as American institutions and enterprises are nationalized.
# They can see that Americans are increasingly alarmed that this nation, under President Barack Obama, may not even be recognizable as America by the 2012 election, in which he will surely seek continuation in office.
# They can see that the economy -- ravaged by deficits, taxes, unemployment, and impending inflation -- is financially reliant on foreign lender governments.
# They can see this president waging undeclared war on the intelligence community, without whose rigorous and independent functions the armed services are rendered blind in an ever-more hostile world overseas and at home.
# They can see the dismantling of defenses against missiles targeted at this nation by avowed enemies, even as America's troop strength is allowed to sag.
# They can see the horror of major warfare erupting simultaneously in two, and possibly three, far-flung theaters before America can react in time.
# They can see the nation's safety and their own military establishments and honor placed in jeopardy as never before.
So, if you are one of those observant military professionals, what do you do?
Wait until this president bungles into losing the war in Afghanistan, and Pakistan's arsenal of nuclear bombs falls into the hands of militant Islam?
Wait until Israel is forced to launch air strikes on Iran's nuclear-bomb plants, and the Middle East explodes, destabilizing or subjugating the Free World?
What happens if the generals Obama sent to win the Afghan war are told by this president (who now says, "I'm not interested in victory") that they will be denied troops they must have to win? Do they follow orders they cannot carry out, consistent with their oath of duty? Do they resign en masse?
Or do they soldier on, hoping the 2010 congressional elections will reverse the situation? Do they dare gamble the national survival on such political whims?
Anyone who imagines that those thoughts are not weighing heavily on the intellect and conscience of America's military leadership is lost in a fool's fog.
Will the day come when patriotic general and flag officers sit down with the president, or with those who control him, and work out the national equivalent of a "family intervention," with some form of limited, shared responsibility?
Imagine a bloodless coup to restore and defend the Constitution through an interim administration that would do the serious business of governing and defending the nation. Skilled, military-trained, nation-builders would replace accountability-challenged, radical-left commissars. Having bonded with his twin teleprompters, the president would be detailed for ceremonial speech-making.
Military intervention is what Obama's exponentially accelerating agenda for "fundamental change" toward a Marxist state is inviting upon America. A coup is not an ideal option, but Obama's radical ideal is not acceptable or reversible.
Unthinkable? Then think up an alternative, non-violent solution to the Obama problem. Just don't shrug and say, "We can always worry about that later."
In the 2008 election, that was the wistful, self-indulgent, indifferent reliance on abnegation of personal responsibility that has sunk the nation into this morass.
The 3 Little Pigs
It's the rare little builder that has made his financial house wholly out of gold, whereas those having none at all is the all-too-common state of affairs down at Old MacDonald's farm. With just a little gold you could have a solid foundation on which to regroup and rebuild. And with just a little more you might have a complete storm shelter in which to calmly endure the winds of change.
The choice is yours. Choose gold -- the 'bacon' you save may soon be your very own.
Uranium's aglow with nuclear plants set to multiply
Uranium prices have dropped about 70% from their highs in 2007, but with Asia's drive for nuclear power going strong, and expected only to strengthen further, there's plenty of opportunity for prices to return to higher ground. Uranium spot prices are at around $41 per pound, having registered a steep decline from a 2007 high of $136, according to industry sources.
Despite that, prices are "still historically high and expected to go up due to increasing demand from new reactor construction, a phasing out of secondary, nonmined supplies and substantial lag time involved in bringing new mines to market," said David Stellfox, European editor of Platts Nuclear Publications. (more)
Saturday, May 22, 2010
Global OTC derivatives
The notional amount of outstanding over-the-counter (OTC) derivatives stood at $615 trillion in December 2009, up from $605 trillion six months earlier, according to the Bank for International Settlements (BIS). That is still well below June 2008’s figure of $684 trillion, which was the highest figure since the BIS began to collect such data in 1998. The amount of credit-default swaps outstanding fell by almost 10% in the second half of 2009. Notional amounts are useful as a measure of market size. But the BIS reckons that gross market values provide a more accurate measure of the amounts that are actually at risk. The gross market values fell by 15% in the six months to December 2009, to $21.6 trillion. (more)
Stocks Sinking to Crash Low Signals Worse to Come
Any investor who wants to gauge how serious the stock market’s retreat is need only know the Standard & Poor’s 500 Index has fallen below its low on May 6, when panic selling prompted calls for reform.
The equity index retreated 3.9 percent yesterday in its biggest loss in 14 months, sinking to 1,071.59, and slipped as low as 1,055.90 today. That compares with 1,065.79, the low two weeks ago when $862 billion was wiped out in 20 minutes. The options market benchmark known as the VIX soared 30 percent to 45.79 yesterday, meaning expectations for volatility are the highest in 13 months. (more)
How I Claimed 4 Houses Free and Clear "From the Banksters"
How I Now Have 4 Houses Free and Clear from “The Gangster Banksters”
This is an amazing true story with documented facts and detailed instructions on how to get your house 100% Free & Clear from “The Gangster Banksters”
A “Must Read & Listen” for anyone who wants the “Truth” regarding how you have been “Deceived” by the N.W.O. Gangster Banksters and the best part is there are detailed instructions on how you can get “Your Remedy”
FREE download of book, click here
listen to audio, click here
This is an amazing true story with documented facts and detailed instructions on how to get your house 100% Free & Clear from “The Gangster Banksters”
A “Must Read & Listen” for anyone who wants the “Truth” regarding how you have been “Deceived” by the N.W.O. Gangster Banksters and the best part is there are detailed instructions on how you can get “Your Remedy”
FREE download of book, click here
listen to audio, click here
Casey Research: Perfect Storm of Debt to Hit US
President Barack Obama’s new fiscal commission, organized in response to a Congressional Budget Office projection that the United States will accumulate $6 trillion in debt during the next decade, is mostly for show, say three researchers from Casey Research.
Though the commission’s task is to come up with ways to limit future deficits to 3 percent of GDP, the 3 percent limit is “just a hoop for the clowns to jump through,” says Casey.
“U.S. government finances are now past the point of no return,” Casey researchers write in a report. (more)
Though the commission’s task is to come up with ways to limit future deficits to 3 percent of GDP, the 3 percent limit is “just a hoop for the clowns to jump through,” says Casey.
“U.S. government finances are now past the point of no return,” Casey researchers write in a report. (more)
32 States Have Borrowed from the Federal Government to Make Unemployment Payments; California Has Borrowed $7 Billion
EconomicPolicyJournal.com has learned that 32 states have run out funds to make unemployment benefit payments and that the federal governmant has been supplying these states with funds so that they can make their payments to the unemployed. In some cases, states have borrowed billions. As of May 20, the total balance outstanding by 32 states (and the Virgin Islands) is $37.8 billion.
The state of California has borrowed $6.9 billion. Michigan has borrowed $3.9 billion, Illinois $2.2 billion.
Below is the full list of the 32 states (and the Virgin Islands) that have borrowed from the Fed to make unemployment payments, and the amounts that remain borrowed as of May 20 . (Numbers in red are billions) (more)
The state of California has borrowed $6.9 billion. Michigan has borrowed $3.9 billion, Illinois $2.2 billion.
Below is the full list of the 32 states (and the Virgin Islands) that have borrowed from the Fed to make unemployment payments, and the amounts that remain borrowed as of May 20 . (Numbers in red are billions) (more)
FDIC: 'Problem' Banks at 775
A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.'s list of "problem" institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.
Poor loan performance in other sectors also continued to hurt banks, with the total number of loans at least three months past due climbing for the 16th consecutive quarter, FDIC officials said in a briefing on Thursday.
"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair said. (more)
Friday, May 21, 2010
Meredith Whitney Sees Bleak Second Half in Stock Market, Small Business Credit Crunch, Double Dip in Housing, Says European Banks in Worse Shape
Over the next 12 months, disappearing state and local government jobs will prove to be a meaningful headwind to an already fragile economic recovery. This is simply how the math shakes out. Collectively, over 40 states face hundreds of billions of dollars in budget gaps over the next two years, and 49 states are constitutionally required to balance their accounts annually. States will raise taxes, but higher taxes alone will not be enough to make up for the vast shortfall in state budgets. Accordingly, 42 states and the District of Columbia have already articulated plans to cut government jobs. (more)
Stocks to Tumble Another 20%, Cash the Safest Place: Roubini
Stocks are likely to continue their aggressive decline and shed another 20 percent in value as the world economy weakens, economist Nouriel Roubini told CNBC.
As the market slides into correction territory, Roubini said weakness in euro zone countries and a slowdown in the US and other developed countries will make things even more difficult for investors in the months ahead.
"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse." (more)
Goldman Sachs Hands Clients Losses in ‘Top Trades’
Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse. Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar. (more)
Dow; S&P Break 200-day MA. ‘Flash’ Lows Were Real
Both the Dow Jones Industrial Average and S&P 500 Index are trading below their 200-day moving average. NASDAQ bucked the trend bouncing back above it 200-day MA. Many analysts in the technical community were unsure if the ‘flash trade’ lows were actual prices which should be included in their analysis, or merely a ‘machine’ blip which can be ignored. As the days have progressed, however, it’s become increasingly clear that the flash trade lows registered in the major averages were indeed real prices and are close to being retested.
My opinion has been that the numbers were real and should be included. The charts of the Dow, S&P 500, and NASDAQ below show that even during those infamous 10 minutes of panic, buyers entered the market close to major support levels (the February lows).In all three examples, the February lows held. (more)
The Greek People are the Victims of a Carefully Engineered Financial Extortion Racket
What is happening in Greece concerns all of us. The people are paying for a crisis and a debt that are not their own. Today it is the Greeks, tomorrow it will be others, for the same causes will produce the same effects if we allow it. First and above all, we express our full and unconditional solidarity with the people who are suffering from an austerity plan without precedent combined with contempt and an arrogance bordering on racism. The strikes and demonstrations are legitimate, and we support them. This is not the crisis of the Greek people, it is the crisis of the world capitalist system. What the Greek people are experiencing is revealing of today’s capitalism. The plan dictated by the European Union and the International Monetary Fund (IMF) rides roughshod over the most elementary rules of democracy. (more)
Pan-European Bank Run Is Now On: Capital Flight From UK To Switzerland, As GBPCHF Intervention Strikes Next
Yesterday we disclosed that the reason for numerous SNB interventions in the EURCHF was due to billions in deposits rushing out of Germany and seeking the relative stability of Swiss neutrality. A quick look at the trading pattern of the GBPCHF shows that it is now UK depositors who are panicking and shifting their money to unnamed (not so much anymore) Zurich bank vaults. The result: a 300 pip move in the GBPCHF as the SNB rushes to put out this particular capital flight fire. Too bad it only succeeded for about 12 hours. The run on the bank (to another bank) in Europe is now on. Zero Hedge.
Stocks Tumble as Investors See Europe’s Crisis Imperiling U.S.
Fears that the fragile economic recovery in the United States might be threatened by the financial and political crisis in Europe gripped Wall Street on Thursday, sending the stock market into a sharp decline and leaving anxious traders wondering where the pain might stop. The 376-point drop for the Dow Jones industrial average punctuated what amounts to a slow-motion crash that began in late April. The Dow has now plunged more than 1,000 points in a matter of weeks, marking what is known as a market correction — a sort of mini-bear market characterized by a 10 percent decline in a short period of time. (more)
The correction is coming and it will be a bloodbath
The correction, soon to be crash, is here: the market had a bigger relative open to close move today than it did on May 6. We closed at the day’s lows on massive volume, despite definitive central bank intervention, regardless whether it was the SNB, the ECB, or the Fed. The central planners have lost control of the market, and all thanks to the inevitable collapse of hyper capitalist Keynesianism coming out of the formerly most communist country in the world. A day of ironies. And it’s not over. Futures are already down another 4 handles. The correction is coming, and it will be a bloodbath. The Fed can not push rates lower. It will print. It is inevitable. It is our destiny. (more)
Russia Palladium Stockpiles May Be Over, Norilsk Says
Russia, the world’s biggest palladium producer, may have exhausted state inventories of the metal, removing a key source of global supply, according to OAO GMK Norilsk Nickel.
Sales from state stockpiles reached 960,000 ounces last year, the third-biggest contributor to world supply after mine output from South Africa and Russia, according to Johnson Matthey Plc. The scale of the government’s stockpiles of the metal used in auto catalysts, electronics and jewelry are a state secret. Norilsk is the world’s biggest producer. (more)
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