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Silver And Gold Remain Near Record Highs As Greek And Portuguese Debt Hammered

Submitted by Tyler Durden on 03/08/2011 07:58 -0500

While most of the focus continues to be on North Africa and the Middle East, the not inconsequential matters of the European sovereign debt crisis and the US’ dire fiscal situation continue to bubble away beneath the radar. Greek and Portuguese bonds have taken another hammering this morning. The Greek 10-Year yield has surged to 12.44% (TD: make that 12.764%), up another 35 basis points today alone, and Portuguese 10-Year has surged to 7.58% (TD: make that 7.66%), another 22 basis points. The recent “bailouts” and failure to properly restructure the debt shows that the sovereign debt crisis is far from contained. The US recorded its biggest monthly deficit in history yesterday with a $223 billion deficit for February alone, the 29th straight month of deficits – a modern record. This does not bode well for the beleaguered dollar and could result in further sharp falls in the value of the dollar. Lloyds TSB's Assetwatch survey finds gold and silver beat all other assets in 2010 due to investors looking to “protect the value of their investments amid the renewed uncertainty over the global economic outlook including the debt concerns in the eurozone and rising inflation.” 

 

No Silver? No Problem: US Mint Would Like To Know If You Will Accept Brass, Steel, Iron Or Tungsten Coins Instead

Submitted by Tyler Durden on 03/07/2011 22:48 -0500

Wonder why the US mint has not sold a single ounce of silver so far in March? Here is a clue: "The United States Mint today announced that it is requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins. These factors include, but are not limited to, the effect of new metallic coinage materials on the current suppliers of coinage materials; the acceptability of new metallic coinage materials, including physical, chemical, metallurgical and technical characteristics; metallic material, fabrication, minting, and distribution costs; metallic material availability and sources of raw metals; coinability; durability; sorting, handling, packaging and vending machines; appearance; risks to the environment and public safety; resistance to counterfeiting; commercial and public acceptance; and any other factors considered to be appropriate and in the public interest."

Guest Post: The Coming Rout

Submitted by Tyler Durden on 03/08/2011 10:06 -0500

There's a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%. The trigger will be the cessation of QE II and a multi-month pause before QE III. This is a reversal in my thinking from the outright inflationary 'buy with both hands' bent that I have held for the past two years. Even though it's quite a speculative analysis at this early stage, it is a possibility that we must consider. Important note: This is a short-term scenario that stems from my trading days, so if you are a long-term holder of a core position in gold and silver, as am I, nothing has changed in my extended outlook for these metals. The fiscal and monetary path we are on has a very high likelihood of failure over the coming decade, and I see nothing that shakes that view. But over the next 3-6 months, I have a few specific concerns.

Oil Breakout Alert - Kuwait, World's Fourth Largest Oil Exporter, Joins Demonstrations Demanding Regime Change

Submitted by Tyler Durden on 03/08/2011 07:18 -0500

Crude dropped overnight, after the FT joined the BBC in the "False Rumor Spreading Korner", after the Libyan Investment Authority held newspaper said some OPEC members are looking to raise oil output to avoid any supply shortfalls. Too bad that just like every other previous rumor-based attempt to drive oil lower, this one was refuted within minutes by the same OPEC members that were allegedly boosting their capacity (which does not exist in the first place). Perhaps if the FT had read the note sent out at midnight by Goldman's David Greely, which noted that there is virtually no spare OPEC capacity left, they would have known why they should have come up with a more credible rumor: like Gaddafi committing suicide after watching the latest episode of Sheen's Korner. So much for the rumor mill. Now on to facts, where instead we see a development which threatens to send oil surging far higher. Reuters reports that formerly peaceful Kuwait has just joined the ranks of demonstrators, demanding the resignation of the prime minister in a peaceful protest early in the day, with a larger one expected later in the day: "Kuwaitis demonstrating outside parliament for the prime minister's ouster came up with a new symbol of Arab discontent on Tuesday by handing out watermelons. "This is for the parliament's poor performance," one of the small band of protesters shouted as he gave a watermelon to a lawmaker making his way into the parliament. The significance was not spelled out, but in local parlance, a person who has a lack of understanding or holds an unrealistic point of view sometimes is called a watermelon. A potentially larger rally was expected later, inspired by spreading Arab protests that toppled leaders in Tunisia and Egypt before sparking the insurrection in Libya and spreading to other Gulf countries including Bahrain, Oman and Saudi Arabia." Kuwait, for those keeping track, is the 4th largest oil exporter in the world.




Why Haven’t Riots Hit the US Yet? 

Don't worry...they will be here soon enough...

Ted Kaufman's Friday Hearing Explains Everything That Is Broken With The US Financial System

Submitted by Tyler Durden on 03/07/2011 22:10 -0500

On Friday, free and efficient market champion Ted Kaufman, previously known for his stern crusade to rid the world of the HFT scourge, and all other market irregularities which unfortunately will stay with us until the next major market crash (and until the disbanding of the SEC following the terminal realization of its corrupt and utter worthlessness), held a hearing on the impact of the TARP on financial stability, no longer in his former position as a senator, but as Chairman of the Congressional TARP oversight panel. Witness included Simon Johnson, Joseph Stiglitz, Allan Meltzer, William Nelson (Deputy Director of Monetary Affairs, Federal Reserve), Damon Silvers (AFL-CIO Associate General Counsel), and others. In typical Kaufman fashion, this no-nonsense hearing was one of the most informative and expository of all Wall Street evils to ever take place on the Hill. Which of course is why it received almost no coverage in the media. Below we present a full transcript of the entire hearing, together with select highlights. The insights proffered by the panelists and the witnesses, while nothing new to those who have carefully followed the generational theft that has been occurring for two and a half years in plain view of everyone and shows no signs of stopping, are truly a must read for virtually every citizen of America and the world: this transcript explains in great detail what absolute crime is, and why it will likely forever go unpunished.

Frontrunning: March 8

Submitted by Tyler Durden on 03/08/2011 08:33 -0500

• Global Bond Rout Resembling 1994 Seen as Inflation Exceeds Benchmark Rates (Bloomberg)
• Libya Rebels Push to Regain Town as NATO Weighs No-Fly Zone (Bloomberg)
• OPEC Members Rush to Raise Oil Output (FT) Since Refuted by both OPEC Member and Goldman Sachs
• Divisions Emerge on US Foreclosure Settlement (FT)
• Policy Disputes Spill Over Into Spending Fight (WSJ)
• Keynes would denounce policies associated with his name (Washington Times)
• Monsters that lurk in the shadows of Wall St (FT)
• China Faces 60% Risk of Bank Crisis by 2013, Fitch Gauge Shows (Bloomberg)
• China Looks to Lift Imports (WSJ)... and to double exports
• EU Watchdog sets tough 2011 bank stress test (Reuters) criteria include whether traders can count to 10 without an abacus
• Rain and Snowfall Ease Drought in China (NYT)...  Cause China said so

The Next Big Short: Restaurant Chains

Submitted by Tyler Durden on 03/08/2011 09:08 -0500

UBS' Andy Lees reminds all those who forgot the carnage in restaurant stocks in the spring/summer of 2008 when oil hit $150, crushing food margins and causing patron visits to plunge due to the $5 gas prices, that the next carnage (once the market starts trading back with some fundamentals) will be in... restaurant stocks. "FTI consulting suggests that it is not just the emerging market countries being squeezed by food inflation, but also a lot of the smaller US food chains. Last year restaurant chains such as Uno Chicago Grill pizza, Fuddruckers and Charlie Brown’s Steakhouse filed for bankruptcy. A lot of the smaller food chains apparently have large debt servicing costs and with cash flow being squeezed by higher input prices they are struggling to keep up payments. Larger companies with strong finances are not falling under these pressures."