Treasury To Stop Funding Its Market Manipulation Fund To Delay US Bankruptcy
After pillaging the G Fund and Civil Service
Retirement and Disability Fund (CSRDF), aka the Government retirement
funds, Tim Geithner was just forced to resort to the final debt
ceiling extension measure: suspending reinvestment in the Exchange
Stabilization Fund, better known as the mechanism by which the Treasury
manipulates the stock, bond and FX markets, often times indirectly
(thank you Brian Sack and Citadel fat pipe) and on occasion with CIA
assistance. What this means is that FX vol will likely hit unseen levels
in the next several weeks as the Treasury's manipulative ways are
strongly curtailed.
Deficit Deal Deception
The Treasury may be ceasing the incremental funding for its market manipulative efforts.... but not quite yet. Presenting the E-mini surge on absolutely no volume. According to Chicago floor traders, at least one bank bought 150 S&P contracts at very the close with one obvious purpose: ramp the stock market into the weekend. Luckily, for the observant ones this is merely another free money opportunity: the ES-RISK spread just soared and presents the latest compression opportunity.
As usual, attached is the complete set of "charts that matter" next week from Goldman's John Noyce, which will hopefully be a useful source of technical clues for anyone trading the all too critical EURUSD which has become the defacto driver of global risk courtesy of 100% correlated ES algos. Being the primary variable doesn't make it any easier to predict: as Noyce observes, "EURUSD trades to new lows then squeezes back into the range - as ever this leaves quite a confused ST picture which makes it difficult to make a strong daily chart based call. The daily chart setup has again become confused at best, but the underlying structure still looks heavy and as such a sell on rallies bias still seems the one to stick with." While in the past we have agreed with Noyce outright (we is by far the best technician at Goldman) this time we are concerned that the EUR is the only one looking at big weakness. The reason why a straddle may be the best trade ahead of next week is that by next Friday many question marks should disappear: on July 21 the Euro parliament will convene for an emergency meeting at which some speculate Greece's fate may be decided, leading to a "soft" or "transitory" default which will send the EUR plunging at least briefly. On the other side of the Atlantic, we have Congress which is supposed to reach a decision (or not) by Friday the 22nd in order to meet the August 2 deadline. If no solution is reached in the next week, it will be the dollar's turn to plunge. So yes, next week will be critical. In addition to the above, Noyce touches on the technical breakout patterns in the BTP and the SPG chart, associated euro FX correlations, and the recent breakdown in JPY. Probably the biggest question is whether the right shoulder of the S&P H&S formation means a major drop back to the 1,260 level is imminent.
U.S. runs $43 billion deficit in June
Year-to-date deficit nears $1 trillion mark
By Robert Schroeder, MarketWatch
July 13, 2011, 2:26 p.m. EDT
WASHINGTON (MarketWatch) — The U.S. government ran a budget deficit of $43 billion in June, the Treasury Department reported Wednesday, pushing the year-to-date deficit close to $1 trillion.
The June deficit declined by $25 billion compared to the same month in 2010, and the $970.5 billion deficit for the first nine months of the fiscal year was $34 billion less than the deficit was in the first nine months of fiscal 2010.
The new numbers arrive as President Barack Obama and congressional leaders are trying to strike an agreement to raise the debt ceiling and cut long-term deficits. Obama’s budget projects that the deficit will hit an all-time high of $1.65 trillion this year before dropping to $1.1 trillion in 2012.
Adjusting for one-time transactions including a downward re-estimate in costs for the troubled asset relief program, the year-to-date deficit for fiscal 2011 would actually be $129 billion, or 11%, lower, Treasury said.
The government spent $293 billion in June and took in $250 billion, according to Treasury’s monthly budget statement.
The Treasury figures were about in line with an estimate released last week by the Congressional Budget Office.
More…
David Duval’s Commentary
I think things are about to hit the fan.
Return of the Gold Standard as world order unravels
As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.
By Ambrose Evans-Pritchard
9:28PM BST 14 Jul 2011
On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save – Spain and Italy – though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe’s currency union.
On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody’s to warn of a “very small but rising risk” that the world’s paramount power may default within two weeks. “The unthinkable is now thinkable,” said Ross Norman, director of thebulliondesk.com.
Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. “Deflationary risks might re-emerge, implying a need for additional policy support,” he said.
The bar to QE3 – yet more bond purchases – is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.
More…
Jim Sinclair’s Commentary
Here is Armstrong’s way of saying things are FUBAR and there is no light at the end of the tunnel.
Deficit Deal Deception
ilene
07/15/2011 - 18:10
Epic Market Closing Ramp Materializes Out Of Nowhere On No Volume, Provides Great RISK-ES Reentry Point
The Treasury may be ceasing the incremental funding for its market manipulative efforts.... but not quite yet. Presenting the E-mini surge on absolutely no volume. According to Chicago floor traders, at least one bank bought 150 S&P contracts at very the close with one obvious purpose: ramp the stock market into the weekend. Luckily, for the observant ones this is merely another free money opportunity: the ES-RISK spread just soared and presents the latest compression opportunity.
Weekly Bull/Bear Recap: July 11-15, 2011
Submitted by Tyler Durden on 07/15/2011 16:50 -0400
The one stop summary of all the key positive and negative news in the week that was.
Guest Post: Made In U.S.A.: Wealth Inequality
Submitted by Tyler Durden on 07/15/2011 16:51 -0400
While we may not make that much stuff in America
any more, we can say that the nation's gigantic wealth inequality is
totally Made in the U.S.A. Before we examine the data in some charts, I
want to stipulate that great wealth in and of itself does not make a
person an "enemy of the people" or threat to democracy. I confess to
having generally lumped the top 1% of wealth holders into one category,
something I have decided to stop doing, as this misses two critically
important distinctions: 1. Not all wealth is created equally; 2. Wealth
destroys democracy and free markets when it buys the machinery of
governance. Much of the debate about wealth inequality focuses on
whether the super-wealthy are "paying their fair share" of the nation's
taxes. If we refer to point 2 above, we see that if the super-wealthy
are allowed to buy the machinery of governance, then they will never
allow themselves to be taxed like regular tax donkeys. In that sense,
the debate over tax rates is pointless, because as long as the
super-wealthy own the levers of Federal governance and regulation, then
they will buy exclusions, loopholes, rebates, subsidies etc. which
relieve them of whatever official tax rates have been passed for public
consumption/propaganda purposes.
Following A Plethora Of Technical Breakdowns (And Outs), Here Are The Charts That Matter Next Week With Podcast
Submitted by Tyler Durden on 07/15/2011 18:49 -0400As usual, attached is the complete set of "charts that matter" next week from Goldman's John Noyce, which will hopefully be a useful source of technical clues for anyone trading the all too critical EURUSD which has become the defacto driver of global risk courtesy of 100% correlated ES algos. Being the primary variable doesn't make it any easier to predict: as Noyce observes, "EURUSD trades to new lows then squeezes back into the range - as ever this leaves quite a confused ST picture which makes it difficult to make a strong daily chart based call. The daily chart setup has again become confused at best, but the underlying structure still looks heavy and as such a sell on rallies bias still seems the one to stick with." While in the past we have agreed with Noyce outright (we is by far the best technician at Goldman) this time we are concerned that the EUR is the only one looking at big weakness. The reason why a straddle may be the best trade ahead of next week is that by next Friday many question marks should disappear: on July 21 the Euro parliament will convene for an emergency meeting at which some speculate Greece's fate may be decided, leading to a "soft" or "transitory" default which will send the EUR plunging at least briefly. On the other side of the Atlantic, we have Congress which is supposed to reach a decision (or not) by Friday the 22nd in order to meet the August 2 deadline. If no solution is reached in the next week, it will be the dollar's turn to plunge. So yes, next week will be critical. In addition to the above, Noyce touches on the technical breakout patterns in the BTP and the SPG chart, associated euro FX correlations, and the recent breakdown in JPY. Probably the biggest question is whether the right shoulder of the S&P H&S formation means a major drop back to the 1,260 level is imminent.
U.S. runs $43 billion deficit in June
Year-to-date deficit nears $1 trillion mark
By Robert Schroeder, MarketWatch
July 13, 2011, 2:26 p.m. EDT
WASHINGTON (MarketWatch) — The U.S. government ran a budget deficit of $43 billion in June, the Treasury Department reported Wednesday, pushing the year-to-date deficit close to $1 trillion.
The June deficit declined by $25 billion compared to the same month in 2010, and the $970.5 billion deficit for the first nine months of the fiscal year was $34 billion less than the deficit was in the first nine months of fiscal 2010.
The new numbers arrive as President Barack Obama and congressional leaders are trying to strike an agreement to raise the debt ceiling and cut long-term deficits. Obama’s budget projects that the deficit will hit an all-time high of $1.65 trillion this year before dropping to $1.1 trillion in 2012.
Adjusting for one-time transactions including a downward re-estimate in costs for the troubled asset relief program, the year-to-date deficit for fiscal 2011 would actually be $129 billion, or 11%, lower, Treasury said.
The government spent $293 billion in June and took in $250 billion, according to Treasury’s monthly budget statement.
The Treasury figures were about in line with an estimate released last week by the Congressional Budget Office.
More…
David Duval’s Commentary
I think things are about to hit the fan.
Return of the Gold Standard as world order unravels
As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.
By Ambrose Evans-Pritchard
9:28PM BST 14 Jul 2011
On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save – Spain and Italy – though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe’s currency union.
On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody’s to warn of a “very small but rising risk” that the world’s paramount power may default within two weeks. “The unthinkable is now thinkable,” said Ross Norman, director of thebulliondesk.com.
Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. “Deflationary risks might re-emerge, implying a need for additional policy support,” he said.
The bar to QE3 – yet more bond purchases – is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.
More…
Bond Investors Should Watch Utility Stocks
CIGA Eric
Utilities due to their high yields and borrowing needs are often considered an equity proxy for bonds. The down trend in Dow utilities to gold ratio (DJUAGOLDR) suggests not only currency devaluation but also caution for bond investors until 2016.
Dow Jones Utility Average (DJUA) to Gold Ratio
Another round of outflows from the bond market should mark a tradable top.
US Treasury Bond 20YR+ (TLT) And US Treasury Bond Diffusion Index (DI)
More…
Quiet History Provides The Best Entry Points CIGA Eric
The gold shares train left the station in 2010. Judging by the size of the crowd bidding farewell to what will prove to be “the acceleration point” of an historic journey, it might be overstatement to suggest few gave/give a rat’s behind. That’s me spot shadowed in the bushes.
In the lexicon of my trading world, it’s called quiet history. They provide the best entry points.
S&P Gold (Formerly Precious Metals Mining)*
*S&P Gold from 1945, Barron’s Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining
More…
CIGA Eric
Utilities due to their high yields and borrowing needs are often considered an equity proxy for bonds. The down trend in Dow utilities to gold ratio (DJUAGOLDR) suggests not only currency devaluation but also caution for bond investors until 2016.
Dow Jones Utility Average (DJUA) to Gold Ratio
Another round of outflows from the bond market should mark a tradable top.
US Treasury Bond 20YR+ (TLT) And US Treasury Bond Diffusion Index (DI)
More…
Quiet History Provides The Best Entry Points CIGA Eric
The gold shares train left the station in 2010. Judging by the size of the crowd bidding farewell to what will prove to be “the acceleration point” of an historic journey, it might be overstatement to suggest few gave/give a rat’s behind. That’s me spot shadowed in the bushes.
In the lexicon of my trading world, it’s called quiet history. They provide the best entry points.
S&P Gold (Formerly Precious Metals Mining)*
*S&P Gold from 1945, Barron’s Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining
More…
Jim Sinclair’s Commentary
The latest from John Williams’ ShadowStats.com
- Economy Falters as Key Indicators Put in Worst Performances
- Higher Energy Prices Create Broad Inflationary Pressures
- Despite Short-Lived Dip in Gasoline Prices June Annual Consumer Inflation Held at 32-Month High
- June’s Annual Inflation: 3.6% (CPI-U), 4.1% (CPI-W), 11.1% (SGS)
- Annual“Core” Inflation in a Steady Upside Move Since QE2
- Higher Energy Prices Create Broad Inflationary Pressures
- Despite Short-Lived Dip in Gasoline Prices June Annual Consumer Inflation Held at 32-Month High
- June’s Annual Inflation: 3.6% (CPI-U), 4.1% (CPI-W), 11.1% (SGS)
- Annual“Core” Inflation in a Steady Upside Move Since QE2
“No. 379: June CPI, Industrial Production”
http://www.shadowstats.comJim Sinclair’s Commentary
Here is Armstrong’s way of saying things are FUBAR and there is no light at the end of the tunnel.
Unfortunately, there is no hope whatsoever of sitting down and
solving the problems. The debate just has not reached the level of
systemic reform. Therefore, until the shit-hits-the-fan, we cannot
expect anything but more economic crisis on the horizon. How do you bail
out countries by lending them more just to keep the Investment Bankers
happy going to solve anything long-term? The debt will increase. The
economic implosion of government continues and the fuels unemployment to
come." –Martin Armstrong
Louis XIII is centuries gone but his money is still good
Will financial journalists ever wonder WHY gold has underperformed?
Friday Humor In Two Parts
Submitted by Tyler Durden on 07/15/2011 15:22 -0400
Today's 'Friday Humor' section consists of two parts: one is high brow, the other... not so much.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
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