Paging Blythe, SLV call volume high, some May PUT premiums IN THE RED, paging Blythe

posted by silvergoldsilver at silvergoldsilver - 1 hour ago

How on earth do premiums decline on the put side, when silver gets crushed? I'll tell you why. No one is buying puts. And the volume on red silver days on the calls is indicating higher fiat prices in Apr...

Atlanta Fed's Lockhart On Headwinds And Tailwinds

Submitted by Tyler Durden on 03/28/2011 14:10 -0400

Atlanta Fed's Lockhart is out with another prepared speech (and this week we will get over ten of these; keep in mind this is all talk - when it comest to voting, Hoenig was the only man who actually could not be accused of hypocricy). Lockhart weighs economic headwinds and tailwinds and comes to a net positive outlook for the rest of 2011 and 2012. Headwinds holding back economic recovery include continued declines in home prices, higher food and energy prices, crises abroad, and fiscal adjustments. Favorable forces—tailwinds—that are pushing the economy forward include improved household finances, moderate employment and income growth, and corporate profitability and ample liquidity. Per Dennis, the financial system continues to heal, supporting growth, although lenders remain conservative and some businesses and consumers still have only limited access to credit. Lockhart foresees continuation of moderate growth, gradually declining unemployment, and the settling of price movements around an inflation rate that is consistent with the Federal Reserve's price stability objective. While short-term measures of inflation have accelerated in the last few months, in Lockhart's view this trajectory will not continue. Lockhart believes that growth in overall consumer prices—at around 2 percent per year through a period of three or four years—is consistent with the Federal Reserve's price stability mandate. He continues to see this objective as attainable. Lockhart remains satisfied with the current stance of monetary policy but is prepared to support a change of policy if evidence accumulates that the low and stable inflation objective is at risk. In other words, Lockhart likely saw subprime as contained back in 2006. In other words, Lockhart most certainly saw subprime as contained back in 2006. The kicker from Lockhart's speech: "contrary to popular opinion, Fed officials actually do eat and fill up their gas tanks." That's admirable: is it with banker money though?

Silver - 8 hour chart update

posted by Trader Dan at Trader Dan's Market Views - 1 hour ago 

Gold - 8 Hour chart update

posted by Trader Dan at Trader Dan's Market Views - 2 hours ago 

 

 

 

Are You Prepared For Another 2008? Pt 1

 

 

 

Revisiting The Grand Farcade: A Visual Guide To Round Two Of The European Stress Test

Submitted by Tyler Durden on 03/28/2011 13:55 -0400

It is no secret that everyone who manages money looks at each and every iteration of the European (or US) stress tests as nothing but a glorified farce, attempting to restore systemic credibility, yet which ulitmately always end up hurting it. That the first European stress test identified exactly zero of the banks that failed within months in Ireland is also no secret. However, with Europe once again out of options, here comes stress test round two. For those who care about this grand farcade (sic), here is a simple visual summary. We fully intend to recreate this post some time in March 2012, describing what Stress Test round 3 will look like. 

 

 

 

Guest Post: Why The European Union Is Doomed

Submitted by Tyler Durden on 03/28/2011 13:24 -0400

To understand the structural flaw which dooms the European Union, we need to start with the Union's fundamental financial characteristics. The European Union established a single currency and trading zone for the classical Capitalist benefits this offered: a reduction in the cost of conducting business between the member nations and a freer flow of capital and labor across borders. But there were flaws in the structure that are now painfully apparent. The Union consolidated power over the shared currency (euro) and trade but not over the member states’ current-account (trade) deficits and budget deficits. While lip-service was paid to fiscal rectitude via caps on deficit spending, in the real world there were no meaningful controls on the creation of private or state credit or on sovereign borrowing and spending. Thus the expansion of the united economy via the classical Capitalist advantages of freely flowing capital and labor were piggy-backed on the expansion of credit and financialization enabled by the Neoliberal Capitalist structure of the union. The alliance of the Central State and its intrinsic desire to centrally manage the economy to benefit its fiefdoms and Elites and classical free-market Capitalism has always been uneasy. On the surface, the E.U. squared the circle, enabling stability, plentiful credit creation and easier access to new markets for all. But beneath this beneficent surface lurked impossible-to-resist opportunities for exploitation and arbitrage. 

 

 

 

Time To Dump TEPCO CDS: Japan Considering Nationalization Of Most Recent TBTF-Club Entrant

Submitted by Tyler Durden on 03/28/2011 14:19 -0400

Per Yomiuri, TEPCO may be up for nationalization, precisely as we had predicted, due to the insurmountable amount of accrued liabilities from the Fukushima disaster which would bury a standalone company. And just as we rode the CDS on the way up from 90 to 460, so now is the time to assume there will be no credit risk whatsoever, now that TEPCO is the first ever Japanese TBTF. Time to bail as central planning is about to branch out.