Fears rise as EU nations aim to raise borrowing


  
Obama's Economic Plan Not a Hit With Economists

A Lesson In Cherry Picking Data From Morgan Stanley

Trade Deficit Narrows to $42.8 Billion in July



Darryl Schoon: Gold, and the Future Way Through Economic Collapse



Greek Prime Minister Shuffles Cabinet as New Economic Fears Loom


Dr. Gary North: Federal Reserve's Digital Bullets Kept an Reserve to Fight Inflation Hedging Mentality


Getting ready for more inflation? One can only wonder why the US Postal Service now requires SDR valuation calculations for insured international shipments. 


After a two week interlude (including a Holiday weekend), the FDIC Friday Follies have resumed, with the announced closure of Horizon Bank, Bradenton, Florida.
OBTW, have you noticed how bank failures have become so commonplace that they are hardly even mentioned by the mainstream media?


Treasurys Tumble Following Weak 30-Year Sale. The rate of return on Treasury paper are bound to rise, and that will push up prevailing interest rates, and that in turn will further slow the economy, including home sales. We are poised to enter a death spiral, folks. Watch interest rates and the US Dollar Index (USDI) closely! If rates spike or the USDI drops below 72, consider those big red flags!

Long Term Silver Chart From Trader Dan

Posted: Sep 11 2010     By: Dan Norcini      Post Edited: September 11, 2010 at 1:16 am
Filed under: Trader Dan Norcini

Dear CIGAs,
Click chart to enlarge in PDF format with commentary from Trader Dan Norcini

COT And Silver Charts From Trader Dan Norcini

Posted: Sep 10 2010     By: Dan Norcini      Post Edited: September 10, 2010 at 7:56 pm
Filed under: Trader Dan Norcini
Dear Friends,
The Commitment of Traders report for this week reveals pretty much the norm for both the gold and silver markets that we have seen over the past 9 years or so.  Speculators consisting mainly of the big funds and the smaller public were buying while the commercial category was selling.
First for gold – managed money flows remain in gold through Tuesday of last week which was countered by bullion bank and swap dealer selling (those two categories can sometimes include the same entity). While the commercial position is not the largest on record, the swap dealer is just shy of a record by some 3,000 contracts.
That sets up a situation where we have a large number of speculative longs sitting in the gold market with prices stalling out near $1,260. The potential for some stale long liquidation is definitely there as a result of the loss of upside momentum so we will want to see how price acts should any downside technical levels be taken out. Quite frankly I would like to see some downside movement in gold just to test the market action to see how aggressive dip buyers will be. Today they were obvious with the decent sized push up off the worst levels of the session. If they continue this sort of stand, bears are going to be quite frustrated and some of the weaker hands will be forced to cover. One way or the other we are going to see rather quickly what kind of strength is in this market.
In a market in a truly strong bullish phase, dips are rather short-lived as buyers are always EAGER to get into the market or to add to existing positions. Thus setbacks in price uncover more buying than they do selling and price quickly reverses and resumes the original trend, which in the case of gold is higher. Since this market is a managed market by the feds, the price action is always a bit inconsistent with a freely traded market but the pattern should hold true – dips will be shallow and not long-lived in spite of the never ending capping action by the bullion bank crowd.
September does tend to be a very strong seasonal month for gold so that is in favor of the bulls. The key will be whether the longs hold their ground and attempt to defend their positions. If they do,  a new high is shortly in the cards. If they run, we will have to see how long stronger-handed bulls wait to wade back in and snatch up more of the yellow metal.
Let’s see what next week brings. The key as in last week is a closing push through the $1,260 level. If the bulls can get price back up and through that level, the bears are going to be forced to retreat to $1,285 or so.
Now for silver – very similar situation as compared to gold with the exception that managed money is sitting at an extremely high level on the long side, the largest since last September.
As was the case last week, the “Other reportables” category (large floor and off the floor traders and some CTA’s) were apparently liquidating longs into buying provided by the managed money crowd. That category is still net long but has come down roughly 4700 net longs in the last two weeks. Perhaps they had a target in their initial trade at $20 and lifted out near that level.
Commercials continue to sell and add shorts (hello Morgan) while the Swap Dealers have moved to a flat position which is interesting. Flat means that they are neither net long nor net shorts but are basically neutral. I find that quite remarkable given their history and given the fact that when the managed money position is at this large of a net long position, they are generally siding with the short side of the market. Let’s continue to keep an eye on this category for I think it might well turn out to be the key to what is going to happen with silver.
As with gold, silver has such a large build of managed money that it will need to keep moving higher through chart resistance levels to prevent some tired longs from deciding to book profits in that category and result in some liquidation pressure. Again, the key will be $20 and whether or not it can punch through that level and HOLD ABOVE it. If not, it will slide lower where we will have to await to see what level the buyers step back in. As strong as it has been of late, one would normally expect to see shallow dips but with silver, the play toy of the funds, one can never quite be sure.
What might happen in there is a wave of liquidation but then a sharp spike higher indicating a recovery and the end of the selling pressure. Such a day of price action would signal the next leg higher.
Click either chart to enlarge this week’s COT and Silver action in PDF format with commentary from Trader Dan Norcini

 


Jim Sinclair’s Commentary
This seems an anomaly in a political sense. Let’s see how long she remains with the FDIC.
It could be that the administration is losing its ladies.

FDIC’s Bair Warns of Government "Exposure" in Mortgages
WASHINGTON (Reuters) – A key U.S. banking regulator raised concern on Wednesday about the risk of "exposure" the government is taking on in the mortgage market and urged more stringent standards for underwriting mortgages.
"We should all be concerned about the type of exposure that the government is taking on through guaranteeing so many mortgages right now and make sure that we do have some prudent underwriting standards," Federal Deposit Insurance Corp Chairman Sheila Bair suggested in an interview on CNBC.
"The government is taking on a lot of exposure and guaranteeing most mortgages that are being originated these days," she said. "And I think the policymakers here are trying to balance the need for prudent underwriting with a need to support… what is still a very distressed housing market."
Mortgage finance giants Fannie Mae and Freddie Mac, under government control since September 2008, and the Federal Housing Administration, currently back some 90 percent of new U.S. mortgages.
Treasury Secretary Timothy Geithner said last month the U.S. government’s role in housing finance should undergo "fundamental change," but that it should still provide some guarantees in the $10.7 trillion mortgage market.
More…



Vacancies Strain White House’s Goals for Economy By SEWELL CHAN
Published: September 10, 2010
WASHINGTON — President Obama signaled on Friday that he was close to choosing a director for a new consumer bureau, but an array of top jobs that will be crucial to shaping economic policy and financial regulation for the rest of his term remain unfilled.
At a White House news conference, Mr. Obama praised Elizabeth Warren, the Harvard law professor who was the chief proponent of the Consumer Financial Protection Bureau and is a front-runner to lead it. Calling her “a dear friend” and a “tremendous advocate” for the new agency, the president said he had talked with her but added, “I’m not going to make an official announcement until it’s ready.”
Ms. Warren is considered a foe of Wall Street but a favorite of liberals. If she were nominated to the post it could set off a partisan brawl similar to the battles that nearly swamped the Dodd-Frank financial overhaul law Mr. Obama signed in July, which created the bureau.
That position, however, is only one of a half-dozen unfilled presidentially appointed posts that have vast powers over the mortgage market, financial stability and the banking and insurance industries. The seats have been vacant even though the new law directed regulatory agencies to make scores of major decisions that will shape Wall Street and the financial sector for years to come.
More…