Indiana Braces For Violence, Adds Armed Guards To Unemployment Offices In Anticipation Of 99-Week Jobless Benefits Expiration

Submitted by Tyler Durden on 11/01/2010 10:58 -0500

As America reaches its two year anniversary from the immediate economic collapse that followed the Lehman bankruptcy, punctuated mostly by vast and broad layoffs across every industry, arguably the most relevant topic that few are so far discussing is the expiration of full 99 weeks of maximum claims (EUC + Extended Benefits) for cohort after cohort of laid off Americans. And since these people are certainly not finding jobs in the broader labor market (which continues to contract and thus make the unemployment percentage far better optically than the 10%+ where U-3 should be), their next natural response will be to get very angry at the teat that has suckled them for so long, and is now forcing them to go cold turkey. Which is why we read with little surprise that now in Indiana, and soon everywhere else, unemployment offices are starting to add armed security guards. Of course, the official explanation if a benign one: "Armed security guards will be on hand at 36 unemployment offices around Indiana in what state officials said is a step to improve safety and make branch security more consistent." Why the need to improve safety all of a sudden? The 99 weeks cliff of course. Which means that on your next trek to the unemployment office to collect that last stimulus paycheck from Uncle Sam, you will most likely see the masked fellow below.

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In The News Today

Posted: Nov 01 2010     By: Jim Sinclair      Post Edited: November 1, 2010 at 2:51 pm
Filed under: In The News

Jim Sinclair’s Commentary
The predictor must be under the assumption that there is no QE this week.

‘The World Does Not Need to End’
A Gold Bull and His Prediction: $10,000 an Ounce By SUSAN PULLIAM
There are gold bulls. And then there is Shayne McGuire.
The 44-year-old pension-fund manager from Texas, who spoke recently at a gold conference in Berlin, caused a stir among the roomful of gold aficionados. His provocation: A book that predicts the price of the precious metal could soar to $10,000 an ounce, more than seven times its current price.
Like those who once boldly predicted $1,000 Internet stocks and a 36000 Dow Jones Industrial Average, Mr. McGuire is a lone voice among mainstream investors suggesting such an outsize price jump in gold’s price.
Mr. McGuire’s view isn’t idle prognostication. He runs a $330 million gold portfolio at the Teacher Retirement System of Texas. Mr. McGuire’s forecast, which he made in the recently released book, "Hard Money," makes him a very far outlier. Most on Wall Street consider the prediction outlandish.
"If you missed" gold’s recent run-up "you have to come up with some pretty sophisticated reasons to buy" now, says Andy Smith, metals analyst with Bache Commodities, a unit of Prudential Financial Inc.
Mr. McGuire was early to the gold trade. In 2007, he and a colleague persuaded the $100 billion Texas fund, the nation’s eighth largest, to move into the metal. It was a novel strategy that made it one of the few large U.S. pension funds to have a fund solely devoted to gold.
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Jim Sinclair’s Commentary
Here is an uplifting thought.

Oh, You Thought We’d Forget The Felonies? Nope. Posted 2010-10-29 11:45
by Karl Denninger 
(COLUMBUS, Ohio) — In response to Wells Fargo’s statement acknowledging that it "made mistakes" and that affidavits in 55,000 foreclosures filed by the bank did not "adhere" to the law, Ohio Attorney General Richard Cordray offers the following statement:
"The big mortgage servicers and financial firms continue to demonstrate their belief that they do not need to play by the same rules as everyone else who uses our court system. The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply refiling new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created. There is no simple ‘do-over’ for false testimony that will be likely to avoid sanctions and penalties imposed by the courts. Their brazen efforts to minimize their financial exposure by sweeping these problems under the rug are an insult to the justice system in this country. These disclosures by Wells Fargo will now become the focus for a new prong of our on-going investigation."
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Hourly Action In Gold From Trader Dan

Posted: Nov 01 2010     By: Dan Norcini      Post Edited: November 1, 2010 at 2:44 pm
Filed under: Trader Dan Norcini

Dear CIGAs,
Last Friday’s action in the metals was a surprise to me considering it was the end of the trading month and the fact that it was only three business days ahead of a major announcement by the Fed in regards to the upcoming QE. I would not expect to see traders getting so aggressive due to the timing of that FOMC meeting not to mention the fact that a major US election is tomorrow. Today seems to be a case of some guys have a few second thoughts about getting too overextended. If you have money on the table, it is wise to take some of it off at times. There is nothing worse than watching a profitable trade turn into a losing trade; nothing!
Personally I am always suspect of traders who make the mistake of getting a dose of bravado in front of a major expected development. They end up either being “heroes” or “zeroes”. I have been burned way too often to get reckless and now leave that to others who are more careless of their trading accounts. QE is coming – there is no doubt about that; the only thing that matters right now to the trading world is how much and how long? That will move the markets for the SHORT TERM (the long term is lots more QE) and such movements could be extremely violent so once again, be careful.
The Fed has embarked on a course of backstopping nearly everything that moves (or more properly – that looks like it might stop moving!) and that is the main feature to keep in mind when surveying the fate of the Dollar and the fate of gold (and silver for that matter). The Commercial real estate market is another disaster in waiting. Don’t forget also that Fannie and Freddie debt is getting unloaded by Foreign Central Banks. Bernanke is not going to want to preside over a deflationary downward spiral and therefore will do whatever is necessary in his view to stave off such an event and work diligently to let the inflation genie out of its bottle. That guarantees more QE; however, short term moves have become purely functions of the hedge fund trading algorithms and those things can produce violent swings so be forewarned.
Technically, gold managed another consecutive close over $1,350 but I do not like the manner in which it did so. I would prefer to see an up day. What today tells me is that some hesitancy is creeping back in and some caution in front of the FOMC. Same goes for silver. It is also evidenced in the HUI and in the rebound of the Dollar off its worst overnight levels. Same thing goes for the bonds – Up in front of the FOMC and then fading back as short term traders snatch profits before they stand the possibility of losing them. I would think that this is the norm until Wednesday. WE’ll see. In the long run, it is just noise particularly when everyone and their dog have figured out that the US wants a lower Dollar.
Guys banking on a collapse in the US equity market had also best be careful. If the Fed comes out with a real gullywasher of a QE announcement, the shorts in equities are going to feel some pain. The stock market is moving higher solely on liquidity issues in my view ( it certainly is not at current levels based on the current status of the US economy) and more liquidity is going to make it difficult for bears to push it substantially lower for the time being.
Keep some of your powder dry until Wednesday afternoon. Existing longs in the precious metals will make more profits for you if the Fed announcement engenders strong buying in that sector. If it is a temporary disappointment, you will have some cash around for buying opportunities once they present themselves.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini