Crunch time for Greece/Gold and silver rise/strange developments in silver deliveries

Harvey Organ, Saturday, June 18, 2011

Crunch time for Greece/Gold and silver rise/strange developments in silver deliveries

Guest Post: New Hampshire Man Burns Self At Courthouse In Protest 

Submitted by Tyler Durden on 06/18/2011 11:32 -0400

A New Hampshire man burned himself to death in front of a courthouse. The specific reasons are individual to him, regarding a domestic violence arrest and prosecution. But the larger reason he killed himself is that he says the system no longer follows the Rule of Law. Once you read past the details, he gives a fascinating analysis of the system. He argues for a complete takedown of the Federal Government and starting over from scratch. He may be an example of what is to come - people throwing themselves violently up against the system in order to bring it down. It's fifteen pages. Longer than Joe Stack's. But much shorter than the Obamacare bill. 

 

 

 

 

 

Is The Highest Equity Put-To-Call Ratio Since S&P 666 An Indication Of A Market Bottom? 

Submitted by Tyler Durden on 06/17/2011 19:42 -0400

Last Friday, the CBOE Equity Put/Call Ratio reached the highest level in the past two and a half years, higher not only than May 2010 when the market plunged on the first Greek bankruptcy, but higher than March 2009 when the S&P hit 666, and lower only than the second week of January 2009. Additionally, while this one off event may be discounted, the 10 Day Moving Average, as shown on the chart below, has now lifted to levels not seen since February 2009. A quite note by Stone McCarthy captures the conventional wisdom on the topic: "Where a 1-day rise in this indicator alerts us to investors temporarily seeking protection against a market decline, an extreme high by the 10-day smoothing line reveals a more comprehensive sentiment buildup that typically proves to be a more reliable contrary indication of a meaningful bottom being NEAR." Perhaps. However, never in the past has the Put/Call ratio been at such levels even despite the multi-trillion backstop of central banks, and worse still, just two weeks in advance of when the Fed will end its daily stimulus program. The is a saying that being contrarian in the face of conventional wisdom is the only sure way to make money. The problem with that saying is that conventional wisdom is quite often actually correct. Furthermore, last time we checked back in January 2009 Greece and Europe were not about to go Chapter 11, nor was a $900 billion asset purchasing program about to end...

 

 

 

 

Rare Earth Metal Prices Go Parabolic 

Submitted by Tyler Durden on 06/17/2011 14:02 -0400

Back in October we asked readers if they have "Ever heard of the oxides of Lanthanum, Cerium, Neodymium, Praseodymium and/or Samarium?" We added that "With price surges between 250% and 600% in one quarter, you may wish you have." As we further predicted, courtesy of Chinese attempts to corner the rare earth space, these oxides were due to explode much further, because as their name implies, these compounds are "rare", and happen to be mostly contained in one country: that's right China. Well, for those who decided to give it the good old speculative college try, you may now retire. As the chart below shows, the YTD moves in the oxides of Dysprosium, Europium, Neodymium, Lanthanum, and all the other ones, have not doubled, not tripled, but in same cases, seen their prices increase tenfold! And people ridicule the silver "bubble"... The extra benefit: the CME's "risk management" group is completely powerless to control the rate of ascent. And judging by the charts below, the rate is certainly worthy of escape velocity. What happens next is that plasma TV purchase one may have putting off for months could end up being costly, after TV producers are forced to double the prices of finished goods, not doing much to help hedonically adjusted core inflation.

Greece To Pass Austerity Plan... With Changes 

Submitted by Tyler Durden on 06/17/2011 14:19 -0400

Spokes, meet stick. According to Reuters, Greece will seek approval from euro zone finance ministers on Sunday to agree to some changes in a mid-term austerity plan that parliament is expected to pass, the country's new finance minister said on Friday. And so the scramble for concessions begins. First Greece will demand a scrapping of all retirement age hike requirements, then public sector cuts, then everything else in the mid-term plan, until the second bailout is effectively without conditions. And now that Merkel has effectively thrown in the towel to her, and the CDU's, political reign by agreeing with the ECB's and France's demands, a move which will be brutalized by Der Spiegel in T minus 5 minutes, the fact that Europe blinked to Greece's bluff, just may mean that every demand out of Greece will be met. Or not. If the Troica tells Greece to go to hell, this could be the end of the bailout package. 

 

 

 

 

 

Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?" 

Submitted by Tyler Durden on 06/17/2011 15:21 -0400

"Moody's Investors Service has today placed Italy's Aa2 local and foreign currency government bond ratings on review for possible downgrade, while affirming its short-term ratings at Prime-1. The main drivers that prompted the rating review are: (1) Economic growth challenges due to macroeconomic structural weaknesses and a likely rise in interest rates over time; (2) Implementation risks surrounding the fiscal consolidation plans that are required to reduce Italy's stock of debt and keep it at affordable levels; and (3) Risks posed by changing funding conditions for European sovereigns with high levels of debt." EURUSD slides on the news, which also pushes stocks far lower, courtesy of 100% correlation. 

 

 

 

 

 

Friday Afternoon Levity - Greek Politikz Explained 

Greek cabinet reshuffle for Dummies/Idiots/Keynesians.

 

USPS Stops Accepting Mail To Canada 

Submitted by Tyler Durden on 06/17/2011 16:57 -0400

But before people scream bloody murder that the USPS finally went bankrupt (3 months ahead of schedule), the blame for this one actually lies with socialist Canada, where the Canadian Union of Postal Workers is continuing its strike, making deliveries of all sorts of unmarked boxes to incognito recipients quite problematic. As a result, "the U.S. Postal Service will suspend accepting mail destined to Canada -- effective Saturday, June 18, 2011, 11:59 p.m. CDT -- with the exception of Global Express Guaranteed shipments." Hopefully Americans trying to reach friends and neighbors in the far more solvent northern neighbor will be able to make do with email attachments for the indefinite future. "As a convenience to our customers and to minimize service disruptions, we arranged to accept mail destined for Canada as long as possible," said Giselle Valera, vice president, Global Business. "We will continue to closely monitor the strike situation, and once Canada Post resumes operations, the U.S. Postal Service will again begin accepting mail for Canada. We also will then resume processing any Canadian-destined mail currently held in our network." Next up: outbound mail to Europe halted indefinitely (except for shipments of secret Fed-originating cash of course), where we are stunned that the local socialist union of postmen still believe in showing up to work daily.

CDS For Doomers, Politicians, And The Media 

Submitted by Tyler Durden on 06/17/2011 18:53 -0400

About the only thing that the doom and gloom crowd, the politicians, and the media all agree on is that credit derivatives are evil, unnecessary, ‘financial weapons of mass destruction’. With the European Sovereign Debt crisis escalating, the CDS market has once again become a topic of conversation. Many of the issues related to CDS that are discussed are old, misleading, or plain wrong. Here is my attempt to address some of the issues that come up most whenever CDS is mentioned: Credit Events; Exposures; Counterparty Risk, and Transparency. These are topics that need to be understood in order for investors to make informed decisions. I am not here to defend CDS as a product, but to try and shed light on the subject so that people don’t react to inaccuracies that cause them to make decisions based on incorrect information. Since so many journalists still feel that the investing public needs to see the boilerplate language ‘when yields go up, bonds prices, which move in the opposite direction, go up’ this may be an uphill struggle. But here is my attempt. 

 

 

 

 

 

Another Friday Night Dose Of Squid Humiliation: Goldman Lowers Q2 GDP From 3% to 2% 

Submitted by Tyler Durden on 06/17/2011 20:24 -0400

It is Friday night, which means that any bad and self-discrediting news from Goldman Sachs are due any minute. Sure enough, the squid does not disappoint: "Following another dose of disappointing economic data, we have cut our Q2 growth estimate to 2% (annualized) from 3%. We also have issued a preliminary forecast for the manufacturing ISM in June of 52.0. At this point, we still expect a bounceback in Q3 and beyond, but will need to see significant improvement in the data over the next few weeks to maintain that view." Zero Hedge's own ISM outlook is for a 48 print. And as we will comment on later, as JPM's Michael Feroli demonstrates, the fate of the economic pick up in Q3 is all up to car sales surging by about 58% on an annualized basis as predicted by IHS. Good luck with that. As we said yesterday, we expect Goldman to lower its H2 outlook to under 2% within a month, most likely following the next ISM miss and the disappointing NFP report due out in 2 weeks.

Things That Make You Go Hmmm - Like Endless Revionist History 

Submitted by Tyler Durden on 06/17/2011 20:31 -0400

There is a kind of rubbernecking excitement that one experiences when we hear a person in position of power, control or money, utter something that is such a blatant lie that we wonder how anyone could believe listeners are so stupid to even remotely believe what is being said. The excitement is only magnified when we go back in time and re-listen the spoken lies, with the realization that they have already proven false. Perhaps nowehere in history is this kind of active revisionist history more appropriate then when listening to central bankers, who have been wrong on more occassions than anyone else in a professional occupation, and still retained their jobs. For everyone who enjoys being amused at the expense of others' stupidity, the latest note from Grant Williams will be full of delightful reminiscences. And while ridiculing idiots and institutional stupidity is easy, there is always a lesson to be learned from someone else's humiliation. Or not. Perhaps sometimes it is best just to jeer at the morons who are in charge of this wholo ponzi house of cards. As Williams says: "The trick is to try and figure out which words of encouragement being offered today by those doing the talking will be remembered for all the wrong reasons when viewed in the rear-view mirror of history. Fortunately, we have a collection of people at the helms of Central Banks, governments, political unions and international organizations who make this job fairly simple as most of what they all say will probably end up haunting them for the rest of their lives. All one has to do to steer through the turbulent waters is work out which comments from public officials are virtually guaranteed to be laughably off the mark, or which smack of far too much invested optimism, discount them in favour of logic and move forward." 

 

 

 

 

 

Guest Post: What Writing A Book Taught Me About Obama And Those Who Followed Him 

My novel Hummel’s Cross takes place in pre-war (and wartime) Nazi Germany. In the course of writing the book I became fascinated by how a nation of such highly sophisticated and astute people as the Germans—who gave us Bach, Beethoven, Luther, Goethe, Schweitzer, Einstein, Handel, Nietzsche, Kant, Wagner, (and thrown in a few Austrians like Mozart. Strauss, and Haydn) etc. could be so easily led to their own destruction – taking much of the Western World with them – by a charismatic if empty man. I remember in the film Gladiator the observation is made that the Roman mob is fickle and easily led. Well, we have seen that in the case of this country in these times the mob is the intelligentsia in the media, the college campus, entertainment and some corners of high finance to name a few groups. In 2008, they looked to Barack Obama and like past societies feeling the need for guidance from on high projected upon him the their own needs, desires and (let’s be honest here) need to cleanse the sense of self-flagellating white guilt they continue to carry over a perceived racism in the country that is now more prevalent as a topic of media round-tables than it is a fact in day-to-day American life. 

 

 

 

 

 

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