Saturday, April 30, 2011

Blythe..Why are you covering your shorts at 5000 year highs (the "top") if silver/gold are supposed to go down now? Got Tells?


It’s 2008 All Over Again… Only Worse
Phoenix Capital Research
04/30/2011 - 14:57
In other words, when this mess comes unhinged it’s going to be much, much worse than in 2008. And believe me, it WILL come unhinged. And this time, when it does, the Fed will have NOTHING to stop it. The Fed’s already grown its balance sheet to roughly $3 trillion AND used every weapon it has to combat Round One of the Financial Crisis. So when the next round hits this time around, the Fed will be powerless to do anything about it.

Things That Make You Go Hmmm: "My Name Is Grant Williams And I’m a Precious Metals Bug" 

My name is Grant Williams and I’m a precious metals bug.
There. I’ve said it.
It feels good to get that off my chest.
Of course, those amongst you who have been riding alongside me these past few years probably already had a sneaking suspicion that was the case and, I imagine, several more of you are now tutting, rolling your eyes and muttering “I KNEW it. Where’s that ‘Unsubscribe’ button?” (bottom of the last page – no offence taken). Well today, we’re going to talk about precious metals again I’m afraid, but in a broader sense if that helps at all. For readers who are over the whole precious metals thing, there’s a nice cartoon on the last page and you’ll find several stories about alternate subjects scattered throughout pages 7 to 15). For those of you still reading at this point, join me inside the recesses of my mind. Please keep your hands and arms inside the carriage at all times.
The nine places where inflation is crushing us.
Goldman Sachs: Too big to prosecute

Obamaflation Arrives

As Munger's Anti-Gold Campaign Kicks Into High Gear, Buffett Confirms He May Have "Held Something Back" About Sokol 

Crony capitalism bailout induced dementia may be a bitch but it sure does put things on the fast track. Specifically, from "Neither Dave nor I feel his Lubrizol purchases were in any way unlawful" to "the Sokol situation is inexplicable and inexcusable" in thirty days. Ignore the fact that Buffett both "explained" and "excused" it when he first announced it hoping that would be the end of course. After all who would dare disturb the kindly old Octogenarian of Omaha atop his perch, after he himself made billions off the backs of taxpayers, the same people his sidekick Munger who did precisely the same illegal frontrunning when he bought a boatload of BYD (oddly nobody brought that one up yet: we are confident it is being saved for the Too Bit To Fail launch party at the Museum of Mirrors) told should only buy gold if they believe the country they live in is going to kill them. We wonder if Munger has seen the price of gold lately, and if that to him is any indication of the genocidal inclinations of said host country. As for the demented one, who ended his letter with: "I have held back nothing in this statement. Therefore, if questioned about this matter in the future, I will simply refer the questioner back to this release" we wonder: now that the validity of that statement has been thoroughly refuted by none other than grandpa Warren, whether he would like to revise it, and if so, can he absolutely, definitely guarantee us that his heir apparent (not to mention Munger) was the only one who would frontrun Berkshire on corporate acquisitions in the past? We promise to believe him this time.

EUR Non-Commercial Spec Positions Surge To Multi-Year High As USD And JPY Prepare To Take Out Lows 

Commodity speculators may or may not be the vile criminals the president and his new working group are making them out to be, but they sure have made their view clear on where they think the USD and the EUR (the JPY not so much) are going. Below is the latest update from the CFTC Commitment of traders report on the three key currencies. While there has been some modest short covering in both the USD and JPY, both continue to trade like the carry funding currencies they are. And with bullish spec positions in the EUR at a multi year highs, the only question is whether the yen or the dollar will be the carry currency of choice in the next beatdown. Of course, how the EUR is expected to retain its lofty perch with all of the PIIGS soon to go under is beyond us, but hopefully it makes sense to Trichet, who is stuck between an inflationary rock and a insolvent peripheral hard place. 

The Cannibalization At The Top Escalates: Sokol's (Re)Response To The Ukulele Master new

David Sokol's attorney Barry Wm. Levine fires right back, and it is now popcorn time. "Mr. Buffett drafted the March 30th press release announcing Mr. Sokol’s resignation in cooperation with Mr. Charlie Munger and Mr. Ronald Olson both of whom are Berkshire Board Members. They know the law and they know the Berkshire policies. In that context, Mr. Buffett correctly declared Mr. Sokol’s conduct lawful and indeed was effusive of his praise of him. There is no new information or new fact which has become available to them since that press release was issued on March 30th...It is alarming that Mr. Buffett would be advised to so completely flip-flop and resort to transparent scapegoatism.
Geithner Nixed Dodd-Frank
Bruce Krasting
04/30/2011 - 08:34
If you thought Dodd-Frank was going to clean up the financial markets, think again. Tim Geithner just made sure that it would not.
Posted: Apr 30 2011     By: Dan Norcini      Post Edited: April 30, 2011 at 7:35 pm
Filed under: King World News, Trader Dan Norcini

Dear CIGAs,

Please click the link below to listen to this week’s metals wrap up from King World News, featuring our very own Trader Dan Norcini.
Click here to listen to the weekly metals wrap up…

Grant Williams: The 'next big trade' may be precious metals again


Sydney Morning Herald cites silver short-selling, quotes Ted Butler


Garry White: Obama's weak dollar, not 'speculators,' to blame for oil spike


Geithner Vs Gross Round 2: Is The Latest "Market Normalization" Proposal By The Treasury A Warning Shot Fired Straight At Alarmist PIMCO?

For months Bill Gross has been very vocally antagonizing the US Treasury by telling anyone who cared to listen that US debt is nothing short of the world's biggest ponzi and that Ben Bernanke is satan. For the longest time Tim Geithner took this effrontery peacefully, always willing to offer the other cheek. Until last night. In what is quite possibly a direct warning shot fired straight at Pimco's primary revenue driver, the Treasury has made it clear Bill may want to focus on unicorns and rainbows in his next monthly letter.

The Feds Are Now Investigating The High Freaks For Quote Stuffing

About a year ago, we wrote an article titled "How HFT Quote Stuffing Caused The Market Crash Of May 6, And Threatens To Destroy The Entire Market At Any Moment" in which we advanced the proposal, first suggested by Nanex, that while High Frequency Trading was the primary reason for the May 6 flash crash, it was a specific aspect of HFT that permitted the Dow to drop 1,000 points in the span of minutes, namely "quote stuffing", or the process of blasting millions of bids and offers without and interest in executing a transaction, merely as a fishing expedition to isolate any "whale" orders and to front run them, making a few guaranteed cents in the process even as this materially distorts true market depth, liquidity and overall stability. And while we were not surprised that the toothless, incompetent and corrupt US securities regulator did take a passing interest in the issue, the topic of "quote stuffing" has finally attracted the interest of US prosecutors. From Bloomberg: "U.S. prosecutors have joined regulators’ investigation into whether some high-speed traders are manipulating markets by posting and immediately canceling waves of rapid-fire orders, two officials said...Justice Department investigators are “working closely” with the Securities and Exchange Commission to review practices “that are potentially manipulative, like quote-stuffing,” Marc Berger, chief of the Securities and Commodities Task Force at the U.S. Attorney’s Office for the Southern District of New York, said today at an event in New York." But, the traditional red herring justification for this criminal behavior goes, they provide so much liquidity which would forever be gone if it weren't for the high freaks.

St. Louis Fed Stunner: Admits QE May Lead To Rise Rather Than Drop In Unemployment

"Permanent increases in the monetary base foreshadow eventual increases in inflation that can increase, rather than reduce, unemployment."So, the Chairman was....lying?

posted by Eric De Groot at Eric De Groot - 3 hours ago
The old World War II slogan "Loose lips might sinks ships" implied that unguarded talk might give useful information to the enemy. Loose lips are suggesting everything from a mania on the verge of collapse...

IceCap Asset Management April 2011 Market Outlook: "A Picture Is Worth 1.8 Trillion Words"

Well, how will Obama balance his budget? Without cutting any spending, he could simply double taxes for everyone – but that wouldn’t work; he’d have to tax the poor and the rich. Since the top 5% of wealthy Americans are already paying over 58% of total US taxes collected, raising their tax burden will likely force them to move to Canada (the land of lower taxes and really good money managers). Meanwhile, raising taxes for the poor isn’t really a good way to get reelected in 2012. So, what does Obama do? Using his Nobel Peace Prize as inspiration, he crafts a plan that will cut spending by $4 trillion over the next 12 years. Then, using his teleprompter for guidance, he orates this plan to congress and the American public in the smoothest of silk possible. It was a great plan, until his very own Vice President, Joe Biden, falls asleep during the speech and on national TV at that. But in hindsight, this was actually smart as it deflected attention away from the details, and as we all know – the devil is in the details. 

Prosecutors investigate market manipulation through quote stuffing


My 6 year old computer... is acting like a 6 year old...

Harvey Organ Saturday, April 30, 2011

posted by Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 3 hours ago
Good morning Ladies and Gentlemen: Before beginning, I would like to announce our latest entrants into the our banking morgue, having taken their last breath last night.  Last week, Sheila gave the troops a...
More to follow...

Friday, April 29, 2011

Gene Arensberg: Significant commercial short covering for silver


posted by Trader Dan at Trader Dan's Market Views - 3 hours ago 
The Dollar's Tombstone should be engraved with not only the above words, but with an addendum carved below that stating: "MURDERED by THE FEDERAL RESERVE" in cooperation with the imbeciles who held public...


Australia hears on TV that there are no free markets, only interventions


No silver lining left for users of the metal 


Doug Casey: Precious Metals Vs. The USD 

The only things that are doing well are the stock and bond markets. But the markets and the economy are totally different things – except, over a very long period of time, there's no necessary correlation between the economy doing well and the market doing well. My view is that the market is as high as it is right now – with the Dow over 12,000 – solely and entirely because the Federal Reserve has created trillions of dollars, as other central banks around the world have created trillions of their currency units. Those currency units have to go somewhere, and a lot of them have gone into the stock market. As a general rule, I don't believe in conspiracy theories, and I don't believe anything's big enough to manipulate the market successfully over a long period. At the same time, the government recognizes that most people conflate the Dow with the economy, so it is directing money toward the market to keep it up. Of course, the government wants to keep it up for other reasons – not just because it thinks the economy rests on the psychology of the people, which is complete nonsense. Psychology is just about the most ephemeral thing on which you could possibly base an economy. It can blow away like a pile of feathers in a hurricane 

Guess Who Just Got Invited To The Printer Party...

One clue: Exhibit A

Posted: Apr 29 2011     By: Monty Guild      Post Edited: April 29, 2011 at 6:43 pm
Filed under: Guild Investment

Dear CIGAs,

A mess by all accounts—and seemingly getting messier.
As we have been saying for some time, U.S. economic growth is stuck in the slow lane.  Very slow lane.  There are few signs of any significant lane changing ahead.
We have seen a serious slide in the American standard of living over the past three years, since the beginning of the recession.  The slide can be measured in many ways.  Food stamps recipients have increased by 48 percent and the cost of the program ballooned by 80 percent  Medicaid recipients are up 17 percent and program  costs are up 36 percent.  Welfare recipients are up 18 percent, and program costs up 24 percent.  That isn’t the kind of growth that’s good for any economy!
Looking ahead, we expect the standard of living decline to continue for up to another seventeen years.  Our economy and society are substantially changed, but the change to date is moderate compared to the magnitude of change ahead.  In 2018, the U.S. will be a much poorer country than it was in 2008.
We envision the average family spending a higher percentage of income on food and shelter.  People will retire at 75 years of age…not 65.  Many may not be able to retire.  Many retirees will have to re-enter the work force as their savings and pensions are diminished in buying power.  The streets will be filled with more poor and homeless.  The dollar will continue its decline. Gold and other commodities will continue to rise in price.  All of these are symptoms of a decline in the public’s standard of living.  Unfortunately, we expect it to last for quite a while.
If it is any solace, the U.S. does not stand alone in the economic muck.  Japan has been going through the doldrums for almost twenty years now and that sorry state of affairs will likely continue for another decade.  Europe’s standard of living is moving in lockstep with the U.S.  We give the Europeans, like the U.S., a poor seventeen year prognosis.  To us, it looks like the developed world is ‘un-developing.”  By 2020, expect to see a more humble developed world, viewing itself differently, playing a lesser leadership role, and having a vastly different view of the use of debt to create prosperity in society.

Labor in the Big Picture
The U.S. has big problems on this front.  The country needs to employ more than 2 million new workforce entrants every year.  Plus, there are millions who lost jobs in the last three years who still need to be rehired.  How does the U.S. deal with challenges like this in a situation of slowing economic growth?  The reality is a very difficult employment outlook for current and future U.S.-born workers, especially those with minimal education and skills, and for immigrants with inadequate English fluency.
Conversely, the jobscape looks brighter for the educated and skilled, especially individuals in the fields of computer science, electronic engineering, mathematics, geology, energy science, and oil field engineering.  The job market also appears better for individuals in some low-paying retail jobs and other service industries who demonstrate good attitudes and a willingness to work.
The U.S. employment picture is changing and it has become necessary for the labor force to have higher skill and education levels in order to compete.  The U.S. still has a comparative advantage over other countries in areas involving technology and skilled labor.  The construction jobs that kept so many laborers working for the past two decades are gone.  We don’t see them returning for many years.  Moreover, there is little unfilled demand for factory workers at high salaries and government employees who receive secure pay and rising benefits.
What can our erstwhile politicians do for us?  Other than utter the usual platitudes, don’t expect much.  For them, the big picture isn’t rosey at all.  If employment growth is a key to getting re-elected, the boys and girls in Congress are in difficult straits.  When the job situation does not improve, expect them to hit the panic button in late 2011.  Their anxiety will generate interest in extending unemployment benefits along with food supplement and other social programs.  All intended, of course, to encourage voters to view them more favorably.  But, in the process, will run up more debt.

The Big Picture — The Risk of Big Government Statism
History has shown that it takes at least a decade for a country to get back on its feet again after defaulting on its debts or losing its reserve currency status.  Washington appears oblivious to this huge and looming risk.  We suggest policymakers consider what happened to Argentina as an example of how to destroy a country’s standard of living.  The Peronists in Argentina took a once-proud country and have driven it to its knees.  When they could find no buyers for their government debt their crowning stupidity was forcing pension funds to buy government bonds.  They have stooped to highly destructive measures that will be felt for a long time in order to delay a day of reckoning by a short time .  This is what irresponsible politicians do.
Look for similar events to occur in the U.S. and in Europe.  Specifically, there is a very large risk that the U.S. will engage in programs such as making citizens and pensions buy government bonds, or legally forcing US. residents to turn in their gold, as was the case during the Great Depression of the 1930s.  There are other tactics they can employ that will result in bigger government and bureaucrats within government agencies usurping legislative power from the legislative branch.  Such things are already happening.
Fortunately, the public is starting to resist such behavior.  We predict an intensifying battle ahead for control of public opinion by big government and small government advocates.  But unfortunately, close to half of the population either pays no federal income tax or gets more assistance from the federal government than they pay in taxes.  That’s hardly a formula for survival.  It’s more like a forumla for collapse. 
The latest U.S. Treasury data (2008) from about 140 million income tax returns exposes the progressive nature of the tax system.  The argument that the rich do not pay their fair share has serious flaws.  In 2008, the top 1 percent earners paid 38 percent of total federal individual income taxes.  The top 5 percent paid over 58 perecent of the total.  About 52 million filers paid no federal income tax and many millions more did not even file a tax return.

Summarizing The Big Picture
The U.S. and European standard of living will fall in the coming years, and perhaps for two decades.  We are only three years into the decline.  Government officials will try to slow the decline by depreciating their currencies to improve exports.  This is already causing oil, gold, and foreign investments to rise in U.S. dollar terms and these trends will continue.
Here and in Europe, government bonds will be harder to sell.  The search for revenues and a desire to shrink deficits will prod governments into cutting defense and social expenditures, as well as raise taxes.  In the U.S., earners in the top 10 percent (those with incomes of about $113,000 and up) will bear the brunt of the increases.  The top 3 percent of U.S. earners currently pays more than half of U.S. individual income taxes.  This situation will eventually cause many high-income earners to leave the U.S. and seek to earn or invest their money abroad, thereby further decreasing the tax base of the country.
The wealth of the nation will fall.  Investors should protect themselves.  It is not too late 

With So Much Economic “Slack,” Where is Inflation Coming From?
It’s a combination of key factors:
● U.S. money supply growth
● Money supply and credit growth in Europe, Japan, Russia, China, India, Brazil, and other countries in the emerging world.
These factors are rapidly adding liquidity to the global financial system.  The liquidity is finding its way into asset and commodity prices.  This has been our long-term view.
Credit growth in the emerging world is a big reason why prices are rising, and one that does not get enough press.  Money supply growth alone without the credit growth would not create inflation.  The developed world banking system is weak.  Loan creation isn’t happening.  But credit growth is booming in the developing world, especially Brazil, India, and China.
These dynamics explain why inflation is now booming in the developed world.  We have been saying for some time that inflation would first arrive in the emerging markets and then migrate to the developed world.  This has happened.
Our next prediction in this string of events is that QE3 will take place in order to combat the slack in the U.S. job market.  Any delay would slow down economic growth and employment.  With an election approaching, you can bet there will be strong pressure from politicians for QE3.
While we are in a predictive mood, we’ll add that investors, seeing more QE (and more government), will send the price of U.S government bonds lower, and currency markets will continue to mark down the value of the U.S. dollar.  This will create a downward spiral of declining dollar and bonds as people around the globe reduce their exposure in favor of investments such as those in our recommendations below.  You will witness a continuing vicious cycle until Washington decides to tighten the belt substantially and decrease its budget deficit.  Only with a real commitment to fiscal discipline that becomes obvious to the markets can the dollar stabilize and U.S. government bonds once again be considered a genuine store of value for investors.

Sign of the times: The International Monetary Fund predicts that China will surpass the U.S. as the world’s largest economy by 2016.

Our Current Recommendations
We’ve been seeing the current string of events coming for years and have repeatedly recommended selling bonds and buying gold, oil and food-related commodities.  This same view along with our close monitoring of world markets have led to our persistent predictions of inflation.  U.S. investors should continue to protect themselves by owning other currencies along with gold, oil, and foreign stock markets.  Avoid U.S. bonds.
It’s interesting to note that in addition to individuals, countries are still buying gold.  Russia bought 600,000 ounces last quarter  We remain very bullish on gold.  Gold is acting very well, technically near $1,500 per ounce, and it looks as if it’s poised to move above $1,600 and $1,700 per ounce soon.
Please see the table below for our current and closed recommendation.

in U.S. Dollars
Commodity Market Recommendations
Japanese Yen
Singapore Dollar
Thai Baht
Canadian Dollar
Swiss Franc
Brazilian Real
Chinese Yuan
Australian Dollar
Japanese Yen
Equity Market
Half Original Position sold
South Korea
Bond Market
30 YR Long Term
U.S. Treasury Bond



Posted: Apr 29 2011     By: Jim Sinclair      Post Edited: April 29, 2011 at 6:51 pm
Filed under: Jim's Mailbox
Dear CIGAs,

http://67.225.157112/ . Please save this link!! With heads of state now able to shut down the internet during a perceived threat, the digital websites will be the first to be reopened. You will be able to get access to charts and quotes while everyone else is scrambling to recover. Nothing better than being prepared! We hope this will help all who trade.
Happy trades to you!!

Fort Wealth Trading Co LLC. 866-443-0868 Ext 104
Fax: 817-764-2537

 Silver Short Squeeze?

It's Getting Plain Silly: MF Global Hikes Silver Margin To 175% Of CME, Or Over 10% Of Contract 

Now it's just getting plain silly. Following two margin hikes by the CME, one for 9% and one for 10% this week, now MF Global, run by former Goldman CEO Jon Corzine has joined the fray, and has hiked its silver margin to $25,397. As a reminder, the latest CME margin is $14,513, or about 6% of the contract value of $241,750 assuming a silver price of $48.35. So MF Global's is 175% of the CME! It is obvious that everyone is now hell bent on destroying the parabolic move higher in gold and silver, which is happening for a very good reason: deranged money printing. Although, as yesterday, we very much doubt MF Global, or anyone else for that matter will hike ES margins any time soon. After all, doing anything to stop the Weimar rallyTM in its tracks is treason of the highest degree under Bernanke's dictatorship and is punishable appropriately. In the meantime, can the exchange just make margin trading in commodities illegal and move to all cash? At least that way all the weak momo hands can be relegated to chasing Netflix and other bubbles, making their eventual pop all the more memorable.


Zero Hedge speculates on short squeeze in silver

Dear Friend of GATA and Gold (and Silver):
Zero Hedge today cites GATA, GoldCore, and Max Keiser in an intriguing speculation about a short squeeze and cornering in the silver market. It's headlined "GoldCore Questions on Comex Silver Default Due to Secret Buying by Russian Billionaire, Chinese Traders, and People's Bank Of China" and you can find it here:

Second Friday Night Economic Bomb Sends Gold Surging To $1,566 As Ireland Slashes Outlook 

And another economic fail, this time an attempt from Ireland to bury bad news on a royal wedding, later afternoon Friday:
  • Ireland revises 2011 GDP growth to +0.8% from +1.7%; 2012 to +2.5% from 3.2%
  • Irish govt revises 2013 deficit forecast to 7.2% from 5.8%; 2012 to 4.7% from 2.8%.
  • Ireland revises 2011 debt/GDP forecast to 111% from 98.6%; 2012 to 116% from 102%
Which only means more stimulus. And since fiscal is out of the question (austerity remember, duh) it means monetary. Which means gold surges to $1,566.


Murray Pollitt: Not enough lifeboats as the major currencies fall


Gold and silver repudiate Fed, Santelli tells King World News


Gold-buying central banks may extend its rally


Adjusted for inflation, dollar hits fiat-era low


Steven Butler, sell the $US dollar on any

Beginning is Canadian politics...forward to 2 minutes 50 seconds

Click hear to enjoy this...


Fed's secrecy is deceitful and corrupt, Texas professor Auerbach says on Bloomberg TV


Markit Responds To Allegations Of CDS Pricing Collusion 

Earlier we observed the long-overdue (noted first here in March of 2009) allegations that Markit among any others may be involved in a massive CDS pricing collusion scheme. Now it is Markit's turn to provide its side of the story. 

The Real Inflationary Threat - Decreasing Foreign Reserves: Why the US Should Expect 8% Inflation For The Next Three Years 

There is some money which is printed, but does not make it into the money supply. Consider the scenario that the Fed prints a dollar that is then either lost or destroyed. It then cannot be used to buy goods, or be lent out and thus does not create inflation. There is something else which can happen to our money which has the same net effect. Foreign central banks can take cash printed from the Fed and place it on their balance sheet. US dollars on foreign banks balance sheets gives investors confidence that their own currency will not be debased. In other words, the real threat of inflation is not the current printing of money which Bernanke et al have been doing. It is the previous printing of money which has been taken out of circulation. The threat is as great as its ever been. The amount of money in foreign reserves is about one third or more of M2, or every dollar which is held by US bank account (business or retail), and all currency combined.

Europe Closes Week With A Friday Night M.A.D. Cluster Bomb, Warns Of Pervasive Bank Restructuring new

Even as America has an insolvent government and a debt ceiling to deal with in the only way it knows - Mutual Assured Destruction, Europe still has a insolvent banking system 10 times greater than America's to worry about.  Which explains the following Friday night bomb (because it is past 6pm in Europe). From DJ:
Translation of bolded: if you hear gronin', MAD's a-bonin' (taxpayers)

A Letter To Congress 

Dear Congressman:

It’s here:  Your moment at the plate.   You’ve whiffed more than a few … and, yes, we’re counting.  But you’ve been gifted another at-bat, and the President’s tired.  Seventh inning stuff is coming out of his teleprompter, and this full-count fastball will be straight, level, and slow.  You won’t see another one like this for five years.

An embattled first term president is faced with an outcome that he must, at all costs, prevent, and he’s done very little ground work ahead of it.  He is about to become the first President in American history to preside over a default on the national debt, unless you vote to let him raise the limit on the financial burden we leave our children.  He would ultimately be crazy to deny any reasonable option, absolutely anything, rather than live with the outcome of his refusal.  Politically speaking, he’s whispered a prayer to the Greek God of Imprudence and Fiscal Insanity, raised a one-finger salute to the nation’s savers through the sunroof of a stolen golden Beemer, and revved it toward the draw-bridge that you were elected to control.

COMEX Default?

GoldCore Questions On Comex Silver Default Due To Secret Buying By Russian Billionaire, Chinese Traders and People's Bank Of China 

Let us reiterate a COMEX default on delivery of precious metals and specifically of silver bullion bars is far from “noise”. It is of significant importance and that is why we have covered its possibility for some months. A COMEX default would have massive ramifications for precious metals markets, for the wider commodity markets, for the dollar, for fiat currencies and for our modern financial system. Silver surged 3.4% yesterday to settle at a 31 year nominal high and rose by $1.55 on the day. Silver is up some 28% in April alone. The last time this happened is when Warren Buffett took a large stake in silver in 1987 and there were rumours of Buffett “cornering the market”. Silver remains in backwardation and the possibility of a COMEX default cannot be ruled out – especially as silver bullion inventories are very small vis-à-vis possible capital allocations to silver in the coming weeks and months. The possibility of an attempted cornering of the silver market through buying and taking delivery of physical bullion remains real and would likely lead to a massive short squeeze which could see silver surge to well over its inflation adjusted high of $140/oz. Indeed, a recent article in the Financial Times suggested that private or state interests with very deep pockets are attempting to corner the silver market. Bizarrely, this massive story which mooted the possibility of Russian billionaires, Chinese traders and even the People’s Bank of China and other central banks secretly buying silver, has subsequently been barely reported or commented on. There are now two “conspiracy theories”. One is the long side conspiracy theory which claims, a la the FT, that there are foreign private and state actors attempting to corner the silver market through secret buying. 

Bernanke Starts Talking, Gold Surges Past $1,558 

Remember when every appearance of Obama and Geithner would send the market plunging before the institution of central planning? Well, we now have a new phenomenon: every time the Chairsatan opens his mouth gold surges. Pretty simple. The second Bernanke started delivering his prepared propaganda at the Community Affairs Research Conference, whose parallel chat session appears to have been overtaken by conscientious objectors, gold surged from the mid $1540s to $1,558. A few dollars here, a few dollars there, and pretty soon we are talking real money...

As First Suggested By Zero Hedge In 2009, Massive CDS Price Manipulation Scandal Erupts, Everyone Implicated 

Back in March of 2009 Zero Hedge, once again a little conspiratorially ahead of its time, solicited reader feedback on a key topic: CDS pricing manipulation, involving in addition to key cartel banks, such "independent" pricing services as MarkIt. We said: "Zero Hedge has received some troubling info (like there isn't enough) regarding major pricing discrepancies between certain securities pricing services. The services include companies such as IDC, Advantage Data, Markit and others. While I will not disclose which one may be a culprit, the allegation is that one (or more) are providing substantially above market pricing levels, specifically as pertains to distressed securities." Then back in August 2010, we followed up by explaining that it is the ongoing price manipulation scheme, in addition to other factors, that allows Goldman Sachs (and other CDS dealers to a much lesser extent) to constantly generate massive profits from trading an opaque off-exchange product like CDS. It took two years and a month for others to take notice of this inquiry, although naturally not in that slum of corruption and market manipulation, the United States of America, but in Europe. Bloomberg reports: "Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and other 14 other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt, regulators said. ...The European Commission said it opened two antitrust probes. It will check whether 16 bank dealers colluded by giving market information to Markit, a financial information provider." So while some post flow charts explaining the hilarity behind conspiracy theories, others actually expose the facts that today are a conspiracy and tomorrow are a full blown criminal investigation.

Swiss Franc Hits All Time High Against Dollar After SNB Books Profit From UBS Bad Bank, Warns On Inflation new

And the parade of dollar negative news continues this morning. First the USDCNY an 18 year low, now the USDCHF hit an all time low, trading as low as 0.8675. This is astounding considering the pair had traded north of parity for pretty much all time until last summer when the USD succumbed to Bernanke's strong dollar policy. The reason for the record surge is attributed to comments by SNB president Philipp Hildebrand who, in observing the economy, says that the "inflation outlook still in range of price stability and Swiss economy grows more vigorously than anticipated." Translation: record CHF has killed off all our exports, and Nutella is about to picket our offices. And in other related, and very entertaining news the SNB said that posted a first-quarter profit of 1.9 billion Swiss francs ($2.18 billion), thanks to gains from currency transactions and a fund in which it parked toxic assets from banking giant UBS. In other words, SNB has now become AIG, booking MTM profits on its literally toxic subprime assets (thank you Brian Sack and Chicago permabid IWR algos), all the while ignoring the 220 billion in USD backing the "asset" side of its balance sheet, which if fairly marked would likely bankrupt the central bank overnight. And people say we can't teach the euros a thing or two about banking...

Chinese Yuan Hits 18 Year High Against Dollar 

The world's most anticipated currency revaluation continues at its traditional glacial pace. And while it is not a surprise to anyone, the overnight PBOC fixing for the CNY dropped below the psychological 6.50 level (or 6.4990 to be precise) for the first time since 1993. Granted, if the US and Chuck Schumer in particular were to stop pushing China to revalue, it would have long since done so at a faster pace, however in light of the diplomatic effort to force it to do so, the ongoing snail's pace shift in FX will continue (and may well reverse now that even more legislation is introduced to the "enforce" China's currency manipulator status). Yet what is notable is that over the past 4 days the CNY has seen a dramatic 0.75% appreciation: easily one of the most aggressive weekly moves by PBoC bands. Is this move merely a political ploy to silence the critics, or is China truly starting to crack under the weight of its own inflation? We shall know soon enough. 

Thursday, April 28, 2011

Harvey Organ, Thursday, April 28, 2011

posted by Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 24 minutes ago
Good evening Ladies and Gentlemen: The data for the next few days will be extremely important and I will bring them to you as I receive them. Before beginning, Adrian Douglas of GATA and Market Force Analy...

posted by Trader Dan at Trader Dan's Market Views - 1 hour ago
The CMEGroup announced that as of the close of trading this Friday, margin requirements are yet again going up in silver. For speculators, initial margin is increased to $14,513 per full sized silver con...



McDonalds Hires 62,000, Turns Away Over 938,000 Applicants For Minimum Wage, Part-Time Jobs

This is what the US economy has been reduced to: McDonalds reports that as part of its employment event to hire 50,000 minimum wage, part-time (mostly) workers, subsequently raised to 62,000 it received a whopping 1 million applications, or a Tim Geithner jealousy inducing 6.2% hit rate (h/t X. Kurt. Osis). Alas, the US economy is now so pathetic that the bulk of the population will settle for anything. Literally anything. And the saddest part: over 938,000 applicants were turned away. Here's hoping to Burger King needs a few million janitors in the immediate future too. And yes, aside from reality, things in America are really recovering quite nicely.

RIMM Halts Stock, Cuts Guidance, Cites Shortfall In Blackberry Sales, Hockeysticks Rest Of Year Estimates

Not good for long-suffering RIMM shareholders: "RIM now expects fully diluted earnings per share for Q1 to be in the range of $1.30-$1.37, lower than the range of $1.47-$1.55 previously forecasted by RIM on March 24, 2011. This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecasted in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices. Gross margin for the first quarter is expected to be similar to the 41.5% previously guided. This mix shift is also expected to result in revenue that is slightly below the range of $5.2-5.6 billion guided on March 24. Expected shipments of BlackBerry PlayBook in the quarter continue to be in line with our previous expectations and we have not experienced any significant supply disruptions in Q1 due to the impact of the Japan earthquake."

The Animated Federal Reserve For Dummies (Literally)

From the bears who explained Quantitative Easing, we now get a crash test dummy simplifying the Federal Reserve's current outlook on life, the universe and everything, courtesy of yesterday's press conference. All confusion abandon ye who enter. 


America's Economy Explained In One Picture

America’s economy in one pic.One animated gif is worth a thousand FOMC press conferences

Reality Check - How Much is that Priced in Euros?
04/28/2011 - 16:02
We are right on track for the next American revolution but it's a slow train so grab those fish while you can, my friends - you may need them to barter with down the road!

Posted: Apr 28 2011     By: Jim Sinclair      Post Edited: April 28, 2011 at 5:10 pm
Filed under: Jim's Mailbox
Wal-Mart: Our shoppers are ‘running out of money’ 


Welcome to the liquidity-driven, debt-laden economic recovery. The demographic of workforce/population reads as follows: (1) the select few prosper, (2) a lot simply try to hang in as long as possible, and (3) the vast majority are squeezed to the bone by the consequences of policies enacted to combat the largest debt crisis in recorded history.
Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.
"We’re seeing core consumers under a lot of pressure," Duke said at an event in New York. "There’s no doubt that rising fuel prices are having an impact."
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.

IWM After Hours Flash Smash

One wonders just what algo told the IWM to not only lift every offer but to do so for a whopping 10% higher than the overall market. Because if you like this market about 50% overpriced, you will love it at 60%. Or was this just Brian Sack telegraphing what the endgoal for the Russell 2000 is before QE2 ends? In other news does anyone even recall what a capital market is like without at least one Chinese fraud being exposed, or at least one synthetic CDO, read ETF, doing some Circque De Soleil acrobatics? We can't wait to hear what the exchanges will use as an excuse for this inverse flash crash. 

More Americans Believe The Country Is In A Depression Than Growing

Probably the only piece of economic news that matters today, and possibly all year, no scratch that, since the "End Of The Recession" (NBER TM) - according to Reuters: "The April 20-23 Gallup survey of 1,013 U.S. adults found that only 27 percent said the economy is growing. 29 percent said the economy is in a depression and 26 percent said it is in a recession, with another 16 percent saying it is "slowing down," Gallup said." That means that more Americans think the country is in a Depression, let alone recession, than growing. Cue crickets and a Bernanke press conference where he discusses alien abductions and 8 toed mutant Madagascar lemurs.


Dollar's 'waterfall' decline began with Bernanke press conference, Turk says


Crispin Odey: "The West Will Become Flooded With Inflation"

Some interesting observations from the transcript of Crispin Odey's Q1 2011 conference call. In a nutshell: inflationary re-exports from the developing world back into the developed is about to make life for chairprinters a living hell.

As One Million Exhaust Jobless Benefits, A Look At What Recent Deteriorating Layoff Trends Means

In addition to today's broad economic disappointment that once again nobody could have foreseen (save for a few comments from us back in January predicting just this most recent contraction), another incrementally negative development which will force the spin doctor to earn their overtime is the observation that over the past year at least 1 million unemployed have now officially fallen off the 99-week gravy train, and exhausted their entire jobless benefits. Luckily, for 10% of the US population there is the magically levitating S&P. For everyone else, there are foodstamps (for now).. and of course the worthless dollar. And in other news, Peter Tchir looks at the recent deplorable jobless claims numbers (wonder why you aren't hearing much about today's initial claims on CNBC? that's why) and comes to the following logical conclusion: "Currently expectations for next Friday's NFP is 183k.  I think the number will be 160k, but in this world it makes no difference since that will encourage belief in QE3 which will trigger dollar weakness which will cause stocks to go up.  Since its hard to go long stocks with this logic, it leaves me looking at precious metals." Tchir is not the only one doing so.

Guest Post: Bernanke's Press Conference, August 1, 2012

August 1, 2012: Federal Reserve Chairman Ben Bernanke once again defended the Fed's accommodative monetary policy at today's press conference. Mr. Bernanke was late to the conference, which was shielded from protesters by riot police. In his absence, a pet parrot was brought out to amuse the waiting journalists, who had been carefully vetted by the Fed to "represent the nation's media." The parrot had apparently occupied a perch in the Fed's conference room, for it repeatedly squawked, "Stocks are up, stocks are up." The Fed chairman finally emerged sometime later, looking somewhat distracted. Recent developments in the global economy have cast a shadow on the Fed's continuation of zero interest rates and quantitative easing, the term describing direct purchases of assets such as mortgages, Treasury bonds and stocks. As the dollar continued its slide, unemployed German workers shouted "Death to America" in mass protests in Germany's industrial heartland. With the euro worth $2, German exports to the U.S. have shriveled, causing a sharp contraction in the once robust German economy.

Indirects Flee From Poor 7 Year Auction Which Pushes Bond Curve Wider

Today's final auction of the week just closed in the form of a $29 billion 7 year bond issue (Cusip: QG8). While we will find out whether or not this is the auction that broke the debt ceiling camel's back when everything settles on Tuesday of next week, the internals were downright ugly: the WI of the bond was trading at 2.68% when the auction priced at 2.712%, a surprisingly wide tail into what everyone claims is a risk free asset. As a result the entire curve has been dragged wider on the news. Among the internals, the Bid To Cover came at 2.63, far weaker than both the previous (2.80) and the average (2.79). But the most notable metric as usual was the Indirect Bid, which traditionally strong at the belly of the curve, saw only 39.1% of the auction going to foreign bidders. This compares to 49.31% in the last auction and 51.45% on average. This meant that Primary Dealers, better known as Brian Sack, were forced to preemptively monetize 53% of the auction, and 7.8% going to Directs. Overall a very poor auction, considering that conventional wisdom was that when the Fed launches QE3 it will focus on bonds at the belly and to the right, in order to moderate inflation. Hopefully (for some) this is not a harbinger that the Bill Gross thesis is finally starting to materialize.

Former SAC PM Pleads Guilty To Insider Trading

Former SAC portfolio manager Donald Longueuil has just pled guilty to charges of insider trading (before the (in)famous Judge Jed Rakoff) in Federal District Court in Manhattan. Dealbook reports: "Mr. Longueuil described in court how after reading news reports about the government’s insider trading last fall he destroyed his hard drive that contained incriminating evidence. The government, however, dropped its obstruction of justice charge against Mr. Longueuil. Under the plea agreement with the government, Mr. Longueuil faces a prison sentence between 46 months to 57 months. Judge Rakoff could depart from those guidelines." And he certainly will if Longueuil, who is a cooperating witness, drops some juicy bombs about every DA's public enemoy number one: ole Crown Lane, Greenwich residing blue eyes himself.

Simon Black Podcast: The Most Sound Opportunities Are Outside The Western World

"In the long run, as decades of capital misallocations and inefficiencies in the global economy get shaken out, there’s going to be a redistribution of the wealth. And I think the wealth is going to go to where it’s treated best. And at the end of the day, that’s really what I’m looking for: the places that have the most solid fundamentals and the best growth potential." So states Simon Black, who travels the world (over 20 countries in the past 3 months) in order to assess and report on the investment and lifestyle opportunities offered by various international destinations for the readers of his blog, His boots-on-the ground observations lead him to conclude that there are a number of resource-rich and fiscally-sound developing nations that are much better positioned to meet the future than the US and its developed counterparts. Smart investors, in his opinion, can't afford to ignore the stability and returns (both financial and lifestyle) these countries offer. They should be asking themselves: do I have sufficient exposure to these opportunities?

Posted: Apr 28 2011     By: Jim Sinclair      Post Edited: April 28, 2011 at 1:21 pm
Filed under: In The News

Jim Sinclair’s Commentary

The weather caused the GDP to be disappointing and that is nothing to be concerned about?

Economy in U.S. Grew 1.8% in First Quarter, Less Than Forecast By Timothy R. Homan – Apr 28, 2011 7:53 AM MT
The U.S. economy grew at a slower pace than forecast in the first quarter as government spending declined by the most since 1983.
Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the last three months of 2010, the Commerce Department said today in Washington. Economists projected 2 percent growth, according to the median estimate in a Bloomberg News survey.
To keep spurring the expansion, Federal Reserve policy makers said yesterday they’ll complete their $600 billion round of stimulus through June. While slower than the previous three months, a reflection of higher gasoline prices, consumer spending climbed more than projected in the first quarter.
“We’ve sputtered a bit here, especially coming off a relatively strong fourth quarter,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast first-quarter growth. Even with the higher costs for fuel and food, “consumers are going to continue to spend. Growth should pick up toward the 3 percent level” later this year, he said.
GDP estimates from 80 economists surveyed by Bloomberg ranged from 0.5 percent to 3.5 percent. The first-quarter pace was the slowest since April through June of last year. For all of 2010, the world’s largest economy expanded 2.9 percent, the most in five years, after shrinking 2.6 percent in 2009.

Jobless Claims in U.S. Unexpectedly Rise to Three-Month High By Bob Willis – Apr 28, 2011 6:57 AM MT
New applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign progress in the labor market may be stalling.
Jobless claims increased by 25,000 to 429,000 in the week ended April 23, the most since late January, Labor Department figures showed today in Washington. The government anticipates a drop in unadjusted applications during the Good Friday holiday week, something that didn’t happen this year, a Labor Department spokesman said.
The report also showed the number of people on unemployment benefit rolls and those receiving extended payments dropped, a sign the jobless rate may fall in coming months. Companies have been cautious about ramping up hiring until they see further signs the recovery is self-sustaining, one reason why Federal Reserve policy makers yesterday pledged to complete their asset- purchase plan by June and keep borrowing costs near zero.
“It’s clearly disappointing,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It may be that the pace of improvement is slowing.”
The economy grew at a 1.8 percent annual rate in the first three months of the year, down from a 3.1 percent pace in the fourth quarter, as government spending dropped by the most in 28 years, a report from the Commerce Department also showed today.

Jim Sinclair’s Commentary

I thought when a rating agency did this it was only a warning! Did this not occur to the US dollar a week ago and was defined as a light warning?

S&P cuts Japan rating outlook to negative By Lisa Twaronite, MarketWatch
April 27, 2011, 7:48 a.m. EDT

TOKYO (MarketWatch) — Standard & Poor’s cut its outlook on Japan’s sovereign rating to negative from stable Wednesday to reflect the potential for a downgrade if the country’s fiscal situation deteriorates more than expected in the wake of last month’s disaster.
S&P said it expects costs related to the March 11 earthquake, tsunami and nuclear crisis to increase Japan’s fiscal deficits above prior estimates by a cumulative 3.7% of gross domestic product through 2013.
“We revised the outlook on the long-term rating on Japan to negative to reflect the potential for a downgrade if fiscal deterioration materially exceeds these estimates in the absence of greater fiscal consolidation,” the rating agency said in a statement.
Three months ago, before the disaster, S&P cut Japan’s rating for the first time in nine years by one notch, to AA-minus. That’s its fourth-highest rating, and is one notch below Moody’s Investors Service’s Japan debt rating of Aa2. Moody’s also has a negative outlook on Japan’s rating.
Much depends on Japan’s political leadership and its ability to forge consensus on how to offset fiscal measures in the future, S&P said Wednesday.
“As long as there are no revenue-enhancing measures such as tax increases, we currently project that reconstruction costs could range from 20 trillion yen ($245 billion) to ¥50 trillion, with ¥30 trillion being our central forecast,” S&P said.

Gold, Silver Hitting Fresh Highs As Dollar Skids to 3-Year Low
Gold and silver hit record highs on Thursday as the dollar's three-year low against a basket of major currencies attracted non-U.S. investors because of the Fed's accommodative monetary policy.


Relentless Dollar Pummeling Continues

At the current rate of collapse, in a few more days the dollar will take out all time lows. Currently holding at 73, after hitting 72.8 overnight, the DXY appears set to test the last support from when the dollar carry trade was all the rage again back in 2008. Of course, for that to happen crude will have to be north of $130, which not even the most incompetent CNBC pundits will be able to spin as positive for corporations (let along the US consumer). It will also mean that any opex inspired corrections in precious metals will not be a frequently recurring phenomenon. But at least Bernanke's plan of inflation our way out of insolvency through a complete currency devaluation is working: after all for all who listened to the Bernanke conference, the only way to rescue the flailing dollar, is first to kill it...

Silver Backwardation Doubles Overnight

Yesterday we correctly predicted that the entire 10% silver correction would be momentarily taken out as the Comex news is properly digested. And so it continues - as silver is once again pennies away from $50 and a fresh new nominal all time high, we take a quick look at the futures curve where as expected the backwardation is confirming the "negative convexity" (yes, yes, we know silver is not a duration security) once the $50 stops are taken out will send silver surging to unseen before levels (which also considering it will be at a new record over $50 is pretty much intuitive). In the meantime, the chart below is the worst nightmare of anyone still holding short silver positions. While the near-far contract backwardation was about $0.75 yesterday, it has since doubled in less than 24 hours. We can't wait to see what surprising nuggets the Comex will bring us today.

Chinese Yuan is Going For Gold… Literally!
Smart Money Europe
04/28/2011 - 06:22
The Chinese yuan is going strong again, breaking the 6.5-dollar-level over night: Thanks Ben! In the meantime, gold demand in China is surging... what does this all mean?

FMX Connect Morning Gold Fix: Silver Warehouse Shenanigans Or The Real Deal?

Our friends at Zerohedge did some excellent discovery and analysis last night on the recent drawdown in Comex Silver stocks eligible for delivery. We have personally seen this activity before, and while we do not doubt the authenticity of the draw down from the Registered (for delivery) stockpile described below; We add that this has happened many times in the past in short -cons meant as exit strategies for big longs. So far, if this is an exit strategy, it is basically what happened in 1997 when Buffet took delivery, but on a much bigger scale, a long –con if you will. But if the reason is that someone bigger that the usual investor community with pockets and a will deeper than all the Bullion Banks combined has decided to de-dollarize their FX reserves, like say China, then this is the way to do it. We think this is real and will describe why briefly after the ZH analysis.

Visualizing The Collapse: Charting The Drop From Q4 2010 To Q1 2011 GDP (Which Came In At 0.8% Ex-Inventories)

The bottom line: Q1 GDP ex-inventories came at 0.8%, the lowest since Q3 2009. The economy has hit stall speed, and absent another fiscal (nope) or monetary (QE3) stimulus, we will go negative in Q2, now that the full impact of the Japanese economic collapse has forced even the ostriches to pull their heads out of the sand. Alternatively, Bernanke will be stuck with the worst case of stagflation since the 1970s. Rock and hard place: just as we predicted in December 2010. The chart below shows the ugly collapse in the economy in Q1: recall that up to a month ago it was supposed to grow by 4%! Now, ex inventories, it is 0.8%. And most importantly, the strong US consumer, in the form of the Personal Consumption Expenditures, sees his share of economic growth drop by over 30%, from 2.8% to 1.9%.

Q1 GDP Prints At 1.8% Misses Consensus OF 2.0%, Plunges From 3.1% In Q4, Initial Claims Surge

Key highlights:
  • US GDP Price Index (Q1 A) Q/Q 1.9% vs. Exp. 2.3% (Prev. 0.4%)
  • US PCE Core (Q1 A) Q/Q 1.5% vs. Exp. 1.4% (Prev. 0.4)
  • US Personal Consumption (Q1 A) Q/Q 2.7% vs. Exp. 2.0% (Prev. 4.0%)
and the kicker:
  • US Initial Jobless Claims (Apr 23) W/W 429K vs. Exp. 395K (Prev. 403K)
More coming

Goldman On GDP And Surging Claims: Expect "Softer Nonfarm Payroll Growth In April Than March"

Not at all surprising, Goldman's economic team continues to (pretend) it is in denial, knowing full well the second it downgrades its Q2 and H2 numbers it is game over. As such its "review" of the ugly Q1 GDP number came out smelling like rainbows and unicorns, namely "this mix of growth - stronger consumption and less inventory building - suggests a bit more momentum heading into Q2." Let's see how this mix is revised in the second and of course third GDP revision. However, where Goldman gets ominous, is its observation of next month's NFP number. If Hatzius is correct (and with his 1.75% Q1 GDP he was the closest of all to the real number), look for the nonfarm payroll number to be beyond ugly, fully opening the door for further QEasing.

Feeling Vindictive? Here Is Your Chance To Bet Bernanke's Printing Career Will End Before December 31, 2011

Feeling like the economy is not the only thing that has taken a dump for the worse? Harboring a nagging suspicion that the Chairman's chances to continue presiding over the free world with a Hewlett Packardian fist may have taken a bit of a hit, and his Wall Street overlords are starting to consider pulling a Hudsucker Proxy and replacing him with Mark Zandi? If so, InTrade has you covered. As of today, you have the chance to bet that the mutant second coming of Rudolph von Havenstein and Gideon Gono will be shown the door, either voluntarily or not, by the end of 2011. In some ways this is perfect way to hedge one's precious metal, stock market, and rates bets, since the entire fate of capital markets continues to rest squarely on the Chairman's shoulders. We wonder how long before Goldman securitizes this InTrade contract and sells the equity tranche to idiot European and Korean money managers...

Wal Mart CEO: "Shoppers Are Running Out Of Money"; There Is "No Sign Of A Recovery"

When a month ago the CEO of Wal Mart Americas told the world to "prepare for serious inflation", the Chairman laughed in his face, saying it was nothing a 15 minutes Treasury Call sell order can't fix (granted net of a few billions in commissions for JPM). 4 weeks later the Chairman is no longer laughing, having been forced to hike up his inflation expectations while trimming (not for the last time) his economic outlook. "U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday talking to USA Today. And if Wal-Mart which is at the very bottom of commoditized consumer retail, and at the very peak of avoiding reexporting of US inflation by way of China is concerned, it may be time to panic, or at least cancel those plane tickets to Zimbabwe, which is soon coming to us." In  light of that perhaps today's words of caution from Wal Mart CEO Mike Duke will be taken a tad more seriously (yes, even with the $50 billion in "squatters rent" that the deadbeats spend on iPads instead of paying their mortgage: that money is rapidly ending). Warning is as follows: "Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried. "We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact." Tell that to Printocchio please.