How exchange-traded fund GLD lets you pretend to own gold

 

Swiss franc jumps as economy minister dismisses intervention

 

The Ever Diminishing Returns Of Central Bank Intervention, Or QE As The Godfather Trilogy

To anyone who is still confused about why the Fed is on the fence about QE 3, the chart below, inspired by David Rosenberg's daily note, should explain it all. While we have repeatedly shown that the intervention of central banks in the FX arena gets progressively weaker with each incremental incursion by central planning into formerly free and efficient markets, the same can be said for not only fiscal stimulus (today's bankruptcy of Solyndra being merely the ironic cherry on top of the house of cards), the same is most certainly true about monetary intervention as well, in the form of LSAP or any other form of duration extension. And while many have already explained extensively why QE was a flop, here is Rosie with an angle we had not considered before: movie trilogies: "it's not as if QE2 accomplished anything except a blip on the screen as far as the market was concerned, and it elicited no lasting benefit for the economy either. QE1 did work but that was when the system needed to be saved - the S&P rallied 74% on that program. QE2 was nothing more than a gimmick shrouded in deflation concerns [uhm, this coming from Rosie? we'll let it slide] that never materialized, and during this program the stock market ended up rising just 16%. And so what will QE3 bring except more in the way of diminishing returns and resource misallocation caused by central bankers attempting to play around with mother nature by manipulating asset prices? Call it the equivalent to the Godfather Triology: Godfather I was epic; Godfather II not quite as good but still fine; and Godfather III was a dud." And as for the appropriate visual...

Sorry QEasy Momentum Chasers: The Economy Still Matters (A Lot)

Watching as the market responds to every piece of bad economic news as if a brand new golden age had just been announced, can sure leave one dazed and confused with nauseating amazement at the success of central planning. Unfortunately for the central planners, and as demonstrated in the previous "Godfather" post, central planning can only do so much (as confirmed holistically by the empirical example of the USSR: no, Benny and the Inkjets are not the first to come up with the brilliant idea of having 13 people run $15 trillion out of a small room). As the following example from John Lohman vividly demonstrates, GDP does and always will impact stocks. Granted it may take them a little longer to respond, especially when prodded by the central printer, but ultimately what has to happen happens. And paritcularly when reaching key inflection points. Such as now. As Lohman notes, "As shown, the growth rate in S&P 500 earnings estimates, and hence expected earnings, has always peaked when the spread between estimates and GDP is more than 1 standard deviation from the mean.  In the most recent cycle the spread between profit expectations and economic reality has gone to all-time highs, but has now reversed.  As further empirical evidence of this phenomenon, the right side of the table at the bottom highlights the change to expectations in subsequent quarters.  Note that they are negative in every instance." Unfortunately, Bernanke can push stocks by promising the moon and the stars, but unless he succeeds in actually pushing GDP up, all his efforts to create a wealth effect will be very soon undone. And with fiscal stimulus still a kneeslapping joke (we won't dwell on the topic of the latest fiasco between Obama and Boehner, suffice to say that if the two can't come up with a decision on how to meet, how on earth will they agree on trillions in fiscal stimulus, especially at a time when America is under "austerity"), we remind readers that according to economists, when using monetary policy to boost GDP, every trillion in LSAPs is equivalent to 0.50% in GDP. Which means a whole lots of LSAPs are coming our way sooner or later.

Stock Mutual Fund Cash Levels Drop To New All Time Record Low

As John Hussman correctly highlighted many moons ago, there is just one problem with the whole "cash on the sidelines" statement - it is completely and utterly wrong. Yet while we agree with it in principle, what is also true is that if you don't have cash, you can't buy stuff, period. Or in this case, equities. Yes, one can sell existing holdings to raise cash, but in an environment such as ours, in which underperforming the levered beta tsunami (or, unlike in 2010, the modest wakeboarding wave) means immediate termination, and where margin debt barely moved off its all time highs even as the general market (and especially fixed income) crashed in a repeat of late 2008, it seems nobody is willing to sell anything, come hell, high water or pink slip. Which is why, semantics aside, the fact that the mutual fund space just saw its total Liquid Assets drop to a new all time record low of 3.3% (down from 3.4%), or about $150 billion on $4.54 trillion in stock assets, is not good, no matter how one defines cash or sidelines. And with so little cash to bid up stocks even as they plunged (i.e., contrary to the expectation cash did not go up), the very troubling question arises yet again: just where will the purchasing power come from (and no, it's not retail: retail is long gone).

Barclays On Brazil Rate Cut: "Unexpected...Unprecedented"

Feeling like one of the 62 sellside analysts tonight, all of whom had no idea Brazil would cut its overnight rate by 50 bps? Wondering what this "unexpected, unprecedented" move means for Brazil? Curious what the implications of this shocking announcement are? Here is Barclays which while still shellshocked, is the first to try to put lipstick on the pig that the BRIC economy suddenly has become.

Post QE2, Corporate Earnings Outlook Changes On A Decidedly Negative Path

US companies' outlooks have been taking a turn for the worst since the end of QE2 as management are guiding (still overly rosy sell-side) analyst expectations down in a hurry. Seems it's not just the banks that are hoping for salvation in September...

Some Observations On Bob Pisani's Visit To GLD's Vault

Earlier today, we were delighted to see that after years of ridicule and provocations, the SPDR GLD ETF finally cracked and decided to do a wholesale PR campaign to comfort the investing public it actually does own its gold, by inviting none other than Bob Pisani in its secret warehouse which allegedly contains 40 million ounces of gold, of which HSBC is custodian and the Bank of England (the same Bank of England which will soon be about 99 tons lighter in gold content once it satisfies Hugo Chavez' physical delivery request) and London Bullion Market Association (“LBMA”) are subcustodians. While the 4 minute PR campaign is enjoyable and we invite readers to watch it, what is amusing is that it is sure to set off another set of conspiracy theories. Here's the reason: amusingly the very gold bar that Pisani demonstrates so eagerly for the camera, Rand Refineries ZJ6752, is somehow, at last check, missing from the full barlist as posted daily by the GLD.Whose is it? Where did it go? When was this clip shot? Inquiring minds want to know...





Gold Isn’t Buying the QE 3 Hype

Posted by: Phoenix Capital...

Post date: 08/31/2011 - 21:51

  This is hardly what I’d call a bullish chart. Gold actually looks to have peaked in mid-August and is now correcting. Indeed, if it doesn’t rally hard now, this pattern could see prices down... 

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Is It Time For The Financial World To Panic? 25 Reasons Why The Answer May Be Yes

Every now and then it is easy to forget that the one or two "better than expected" data points blasted by flashing headlines do nothing that merely mask what is an otherwise quite deplorable and deteriorating reality. For the disconnect between America and the rest of the world look no further than this chart showing the dramatic divergence between the DJIA, which has just gone positive for the year, and every other major global stock market. Yet for those who require a narrative to go with their numbers, here is The Economic Collapse with the latest of their traditionally comprehensive bulletins, this time summarizing the "25 signs that the financial world is about to hit the big red panic button."

Brazil Central Bank Unexpectedly Cuts Its Overnight Rate To 12.0% From 12.5% Following Observations Of "Substantial Economic Deterioration"

In a shocking move, one which is sure to reverberate around the Developing and certainly Developed World, the Brazilian Central Bank just announced that it was cutting its Selic (overnight lending) rate from 12.5% to 12.0%, citing "substantial economic deterioration" - something that not one of the 62 analysts covering Brazil had anticipated. It seems that following over a year of small arms fire FX intervention sniping, Brazil has finally reevaluated its growth prospects, and instead of dealing with the inflow of capital on a piecemeal basis by buying dollars daily - a move which has not worked at all, has decided to cut off flows at the stem. This is most likely the first of many rate cuts by Brazil which is obviously anticipating a major growth contraction in China, and as a result we expect the the other BRICs will very soon reevaluate their stance vis-a-vis being the remaining target of global capital flows. Ironically, up until now it was mostly the developed (read bankrupt) world that was devaluing its currencies... Well, make way for the new kids on the block because this is about to get interesting.

Fed to hasten currencies' race to the bottom, Leeb tells King World News

BK Is Out Of BK: BNY Chairman And CEO Kelly Forced Out Due To Differences With The Board On Managing Company

Some very out of left field late news from the only other tri-party repo in addition to JPM and key corrupt player in the Bank of America settlement litigation, BNY Mellon, whose Chairman and CEO Bob Kelly has just stepped down "because of differences with the board in the approach to managing the company." His replacement will be president Gerald Hassell, effective imediately. Uh, those never occur unexpectedly. Something big is happening behind the scenes, and alas we ave no idea what it is. Is this the first step to setting up the replacement for Brian Moynihan? Look for the kneejerk response in BAC stock for the answer. Or did the Bank of America settlement, already improbable, just get impossible?

Monthly Gold Charts - August 2011

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

What an impressive performance by Ol' Yeller for the month of August! Note that Gold has bettered the all time high CLOSING price on an inflation adjusted basis.





Harvey Organ, Wednesday, August 31, 2011
Gold closes higher but silver's performance stellar / over 15 million oz of silver standing






Anybody Dumb Enough to trade Physical for Paper Promises? We will Soon Find Out... 

More Bad News For Euro Banks: SocGen, Intesa And Unicredit Kicked Out Of Stoxx 50 Index

Yes, you can't short them. But that doesn't mean you can't sell them. Which is precisely what index funds will be forced to do after the main European index, the Stoxx 50, announced that it will be removing battered SocGen, Intesa and Unicredit from its list of constituents (as well as that anachronism of a cell phone maker Nokia). Let's hope that European HFTs jump in to prop the bid. Oh wait, unlike our farce of a levitation machine, Europe does not have HFT, which is why following every overnight session it is our vacuum tubes' patriotic duty to buy everything up into the close with a millisecond holding pattern, only to dump it to other algos, and ultimately retail and ETF hands. And since every loser has an equal and opposite winner, the companies that will replace the aforementioned sinking ships are Unilever, LVMH, National Grid and Air Liquide.

Guest Post: Bear Market Bounce OR New Bull Market

The question that I have been asked more today than almost any other time in the past month has been "Is This The Time To Start Buying Back In?".  With the recent rally off of very oversold conditions in July and August, a reflex rally has been in the offing.   Also, with this being the end of the month, we are seeing portfolio window dressing for mutual funds. However, a brief review of our technical indicators is in order to determine where we are in this current market environment and what the potential "risk" versus "reward" of being fully invested currently is.






Jim Sinclair’s Commentary

The financial problem is the entire Western World.

UK plunges into debt danger zone after Labour’s 10-year borrowing binge, says finance watchdog By Hugo Duncan
Last updated at 10:25 AM on 31st August 2011
Britain’s debt levels are dangerously high and are damaging the economy, according to one of the world’s leading financial watchdogs.
Debt in the UK grew faster than in any other major economy in the last decade to £180,000 per household.
It means the country is in the danger zone following a ten-year borrowing binge under the last Labour government, a hard-hitting report from the Bank for International Settlements has revealed.
Its chief economist, Steve Cecchetti, said: ‘Beyond a certain level, debt is bad for growth. At low levels, debt is good. It is a source of economic growth and stability. But at high levels, private and public debt is bad, increasing volatility and retarding growth.’
The BIS said government, corporate and household debt in Britain jumped from 223 per cent of gross domestic product in 2000, or £2.18trillion, to 322 per cent, or £4.68trillion, in 2010. That is the equivalent of £180,000 per household.
The 99 percentage point increase was the biggest of any leading economy and left Britain deeper in the red than any country in the Group of Seven industrialised nations except Japan.
More…

Fix The Banks!

August 31, 2011, at 1:09 pm
by Greg Hunter in the category USAWatchdog.com |  Print This Post |  Email This Post

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

If there is one central theme to the ongoing financial crisis we face, it is an insolvent banking system.  It is so bad that the accounting rules were changed (after the financial meltdown in 2008) to allow banks to value assets on their books at whatever they think they will fetch far into the future.  So, the billions of dollars of underwater mortgage-backed securities and real estate sitting on the balance sheet is held at imaginary values to make many banks look solvent when, in fact, they are not.   This is opposite of the way the IRS values assets.  The price of something is based on what the asset is worth today.  This is called mark to market accounting.
If any of the banks (especially the big banks) want to prove me wrong on this point, then they can simply value all their assets for what they can get for them today and the argument is over—fat chance!  I never see this subject ever brought up when the president of a big bank is interviewed.  I’ll bet you Jamie Dimon of JPMorgan would really squirm if he was asked what his bank would be worth if all the assets on the balance sheet were valued at today’s price.
In January of 2009, I wrote a piece called “Default Option.”  I had the crazy idea that the big banks should be taken into receivership.  Yes, shareholders and bond holders would have been wiped out.  Tough—that’s investing.  The only people you would have to protect are the depositors and, at the time, it would have cost $6 trillion.  I said, “Letting those banks take the hit for their ill-advised, reckless investments based on greed will do many things.  Here are just a few.  Letting the reckless banks fail will limit taxpayer exposure, preserve our capital and our credit rating as a country. Bank failure will wash bad debt out of the system once and for all and protect the dollar from free fall.  Finally, I think in the end it will be cheaper and more effective than what has and will be done in the future to “fix” the credit crisis.”   (Click here to read the original Default Option post.) 
Fast forward to today, and we see the dollar is falling, gold is spiking and the credit rating of the U.S. has been cut.  My plan was downright miserly when you consider that the Fed (according to a recent GAO report) spent $16 trillion bailing out the world, with $5 trillion going to foreign banks alone.  If you really want jobs in this country, you need capital formation not–debt formation.  Capital invests in productive assets, and productive assets create real jobs!  We still have a crippled banking system despite spending trillions of dollars, and there are still no jobs!
More…

Jim’s Mailbox

August 31, 2011, at 2:44 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Dear Jim,

It’s going to be a very interesting September.

Regards,
CIGA Pedro

"That is why we need a plan “C”: Austria, Finland, Germany and the Netherlands to leave the eurozone and create a new currency leaving the euro where it is. If planned and executed carefully, it could do the trick: a lower valued euro would improve the competitiveness of the remaining countries and stimulate their growth. In contrast, exports out of the “northern” countries would be affected but they would have lower inflation. Some non-euro countries would probably join this monetary union. Depending on performance, a flexible membership between the two unions should be possible."

More…

The writer is former head of the Federation of German Industries (BDI) and has joined about 50 other business leaders in a legal challenge at Germany’s Constitutional Court against the Greece rescue package.

Wall Street Journal and New York Times commentaries urge: Murder gold

 

 

How new Chinese gold exchange may defeat paper market

Once you watch this video...you will Never think the same way when watching the Wizard of Oz...

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Belarus Hyperinflation Update: Food Runs Out As Friendly Foreigners Take Advantage Of The "Favorable" Exchange Rate Arb

Yesterday we had the first case study of what happens in a hyperinflation, when we noted that the local central bank had just hiked interest rates from 22% to 27%. Net result for the economy? Zero. Today is case study #2 where we learn what happens to an imploding economy which happens to be surrounded by friendly neighbors who just happen to find themselves in a massive arbitrage courtesy of a currency that is losing multiples of its value on a monthly if not daily basis. Per Bloomberg: "Belarus’s supermarkets are running out of meat as Russians take advantage of a currency crisis that a devaluation and the world’s highest borrowing costs have failed to stem. “All meat has gone to Russia,” Alexander Andreyevich, an 82-year-old former tractor-plant worker, said Aug. 25 in Minsk, the capital. “My relatives near the Russian border called me a few days ago and said the shops are empty."..."Private stall owners simply go and buy meat from state- owned vendors and sell it a couple of steps away for a hefty profit,"Deputy Agriculture and Food Minister Vasily Pavlovsky told reporters in Minsk Aug. 24. The government banned individuals in June from taking basic consumer goods such as home appliances, food and gasoline out of the country. Russians, buoyed by the removal of border checkpoints July 1 as part of a customs union, have circumvented the restrictions." Funny- if the locals had preserved their purchasing power by holding their money in gold, they would not find themselves in a position where those who still have a stable fiat exchange rate (for the time being) can literally steal products from under their noses for a paltry sum as sellers scramble to converts products into some currency before it is devalued even more tomorrow.

QE3 Levitation Day 3... Brings the DJIA To Positive For The Year, In Comic Contrast With The Rest Of The World

And so it continues, as it was outlined yesterday, and the day before. There is little to add here: 50 ES points in three days on substantially below average volume (red area chart), robots gunning for VWAP, and nothing but hollow expectations for QE3 despite the clear quandary for the Fed that absent a clear deflationary threat, read a plunge in stocks, it will be very difficult for Bernanke to sell easing to the dissenting votes. The important thing: unlike every other relevant market in the world (Belarus may be a notable exception), the DJIA is now green for the year. In the meantime bonds continue to ignore the whole move in stocks. Of course, if this is just a career protection rally for the end of the month, the reconnection of stocks with gravity tomorrow will be painful. Alternatively, gravity will be even more painful if the Fed does end up disappointing on September 21, which it may have no choice but to do if stocks price all of it in by then.

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Greek Bailout #3 Coming? Barroso Working On "New Greek Program"

Well the second Greek bailout lasted all of... 5 weeks. Time for Bailout #3?

• EC PRESIDENT BARROSO SAYS WORKING ON NEW GREEK PROGRAM
• BARROSO SAYS EC REVIEWING WITH ECB AND IMF GREEK FIN. ASSIST

In the meantime, we learn that while two broke Greek banks just merged to create a bigger broke bank, the country's 4th largest bank admitted to resorting to the last ditch liquidity program discussed on Zero Hedge a week ago.

Gold marking time

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

Gold has been relatively quiet after the extreme volatility of recent days, a very welcome development. You can note the declining trend in volume as evidence of the more "tranquil" trading conditions. We are currently running into overhead selling resistance near $1850 with buyers either unwilling or unable to take it through this level without some sort of fresh news. Sellers meanwhile have been thwarted in any efforts to break prices significantly lower. The present posture is one of consolidation with some buying surfacing down near the $1800 level and further below towards $178... more » 

 

 

 

 

 

Lockhart Hints At More QE: "No Policy Option Can Be Ruled Out At The Moment" And "Slow Growth Bigger Problem Than Inflation"

Yesterday it was Evans saying explicitly it was QE3 or bust. Today it is Lockhart's turn to stop just short of reiterating what is now getting prices in every single day: "As you know, the FOMC stated after its last meeting the intention to keep the policy rate at near zero for two more years. Also, the current policy is to maintain the Fed's balance sheet scale for the foreseeable future. I support this position. Given the weak data we've seen recently and considering the rising concern about chronic slow growth or worse, I don't think any policy option can be ruled out at the moment. However, it is important that monetary policy not be seen as a panacea. The kinds of structural adjustments I've been discussing today take time, and I am acutely aware that pushing beyond what monetary policy can plausibly deliver runs the risk of creating new distortions and imbalances." He is aware, yet he will gladly vote for it when the time comes. And the time will come very soon because as he just said during his speech Q&A, "slow growth is now a bigger problem than inflation"... which as we showed yesterday is 4%, and "that we have a jobs crisis." Net net: one more dove doing what he does best - beg for more inkjet cartridges.

The "Shining" Example Of Obama's $787 Billion Fiscal Stimulus Act, Solar Energy Company Solyndra, Files For Bankruptcy

Yesterday Zero Hedge contributor Bruce Krasting had some very insightful and very prophetic words when he asked rhetorically if a "Government investment disaster in the works??" The company in question is (now former) massively subsidized solar energy company Solyndra. Solyndra filed for bankruptcy less than 24 hours after Bruce proposed that the company is nothing but a stimulus black hole. We congratulate him on his investigative efforts. Alas, being private, there was no way to short it and capitalize on this investigative coup de grace. And while there are no winners, there are plenty of losers? Who - why US taxpayers of course. Why? Because as some may recall, Solyndra is one of the "shining examples" of Obama's $787 billion American Recovery and Reinvestment Act. After all none other than president Obama said that Solyndra is "leading the way toward a brighter and more prosperous future.” He also cited it as a success story from the government’s $787 billion economic stimulus package." Alas Solyndra has now become a less than shining example of the complete catastrophe this latest exercise in pointless Keynesianism has been, all on the backs of US taxpayers. But don't worry, Obama is about to bring us a fresh new such fiscal stimulus catastrohpe any minute. This time it will be different.

Greece Itself Now Openly Ridicules Europe's Lies Of Greek "Stability"

Compare these two statements: first from Reuters- "Greece's debt has run out of control and government policies are failing to restore finances, an independent parliamentary committee of experts wrote in a report released on Wednesday." And second, from Bloomberg: "Greece’s debt is on a “durable declining path” and new projections will show that the second rescue program reduces net  liabilities, European Union Economic and Monetary Commissioner Olli Rehn said." Sorry Europe: your credibility, whatever was left of it, just ran out. When the indirect object of your bail out effort (the direct one being naturally your central bank and your various local banking oligarchy of course) says in your face that you are full of excrement, it is time to put a fork in it.

Remember The 15 Sigma Surge In Greek Financial Stocks This Week? Here Is An Update

Submitted by Tyler Durden on 08/31/2011 - 15:52
Remember the 15 sigma move (yes, the move was 15 standard deviations) in Greek financial stocks on the failed attempt by the country to create its very own TBTBF bank with some Petrodollar support? Here is a quick update of how that ended up.







China and Copper

Posted by: Michael Victory

Post date: 08/31/2011 - 12:57

Buying the dip. 

 

 

 

 

 

Slave Nation - Nature or Nurture?

Posted by : Cognitive Dissonance

Post date: 08/31/2011 - 14:20

What exactly do we have left after several decades of frenzied spending and mindless consumption? I’ll tell you what we have left. We have our rituals and dogma, and soon enough not much more. 

 

 

 

 

 

 

 

In The Meantime, European Liquidity Conditions Continue To Deteriorate With An Emphasis On SocGen And Barclays

Submitted by Tyler Durden on 08/31/2011 - 10:28 Barclays headlines LIBOR Shadow Banking SocGen While there are those financial publications who have realized that reliance on shadow markets for unsecured repo and otherwise lending may be troublesome in the short-, medium- and long-run, something we warned back in March 2010, a far more tangible threat is not what is happening in the already largely contracting shadow banking realm, but in real, non-shadow markets. Because for shadow to be impaired, these traditional liquidity conduits would have to be shut down first. Alas, while stocks resolutely continue to ignore anything but both good and bad headlines, all of which justify either QE3 or a surging economy (nothing new - as we have said this will occur most likely through the end of the year in a carbon copy of 2010), liquidity in non-shadow markets is the most impaired it has been in a long time, with 3M USD Libor rising again to 0.327% from 0.326%, although the story as usual lying below the headlines. As the charts below show not only are European banks seeing their LIBOR rates increasing (in as much as any of this is even remotely credible), with SocGen and Barclays the two most troubled banks from a self-reported liquidity standpoint, but also that the spread between the lowest and highest reported LIBOR is now the widest it has been in all of 2011. A few more days in which European funding markets completely ignore what is going on with US stocks (the same as US bonds incidentally), and the time to talk about shadow banking repo halts may indeed be nigh.

Joel Salatin: How to Prepare for A Future Increasingly Defined By Localized Food & Energy

"What we view today as "normal" I argue is simply not normal. Just think about if you wanted to go to town 120 years ago. If you wanted to go to town you actually had to go out and hook up a horse. That horse had to eat something, which means you had to have a patch of grass somewhere to feed that horse which meant you had to take care of some perennial in order to feed that horse in order to go to town. And so throughout history, you had these kinds of what I call ‘inherent boundaries’ or brakes on how much a single human could abuse the ecology. And today, during this period of cheap energy, we’ve been able to extricate ourselves from that entire umbilical, if you will, and just run willy-nilly as if there is no constraint or restraint. And now we are starting to see some of the outcome of that boundless, untied progression. And so the chances are, the way to bet, is that in the future we are going to see more food localization, we are going to see more energy localization, we are going to see more personal responsibility in ecological lifestyle decisions because it's going to be forced on us to survive economically. We are going to have to start taking some accounting of these ecological principles."

Germany, France Repeat Tobin Tax Threat

Two weeks ago when expanding its debt monetizing vehicle, the SMP, to include the debt of Spain and Italy, one of the few appeasements offered to the public by "Europe" was the resolute demand that a transaction tax, aka Tobin, be enacted immediately if not sooner. Today, about two weeks later, the same behemoths of European structural stability, Germany and France, hoping the general public has largely forgotten all that was said in mid-August, has come out with the generous announcement that... they will propose a financial transaction tax. It is unclear if sometime between the first proposal and today's, Merkozy dropped the demand for Tobin Taxation, in order for it to be priced in once again as an indication of the fiscal prudence of the European leaders. And if so, will the market respond like it did last time around and plunge by 5-10%?

Guest Post: Marx, Labor's Dwindling Share Of The Economy And The Crisis Of Advanced Capitalism

Marx predicted a crisis of advanced Capitalism based on the rising imbalance of capital and labor in finance-dominated Capitalism. The basic Marxist context is history, not morality, and so the Marxist critique is light on blaming the rich for Capitalism's core ills and heavy on the inevitability of larger historic forces. In other words, what's wrong with advanced Capitalism cannot be fixed by taxing the super-wealthy at the same rate we self-employed pay (40% basic Federal rate), though that would certainly be a fair and just step in the right direction. Advanced Capitalism's ills run much deeper than superficial "class warfare" models in which the "solution" is to redistribute wealth from the top down the pyramid. This redistributive "socialist" flavor of advanced Capitalism has bought time--the crisis of the 1930s was staved off for 70 years--but now redistribution as a saving strategy has reached its limits... That gambit has run out of steam as the labor force is now shrinking for structural reasons. Though the system is eager to put Grandpa to work as a Wal-Mart greeter and Grandma to work as a retail clerk, the total number of jobs is declining, and so older workers are simply displacing younger workers. The gambit of expanding the workforce to keep finance-based Capitalism going has entered the final end-game. Moving the pawns of tax rates and fiscal stimulus around may be distracting, but neither will fix advanced finance-based Capitalism's basic ills.





We’ve Seen How These Trader Games End Before: BADLY

Posted by: Phoenix Capital...

Post date: 08/31/2011 - 12:03

    QE 3 won’t solve this mess (assuming it even arrives). Neither will the European bailout fund. We’re already in the Second Round of the Great Crisis which will see the EU broken up, the... 

 

 

 

 

 

The Fed's Plan - Rumors of News

Posted by: Bruce Krasting

Post date: 08/31/2011 - 12:15

A complicted story. I'm looking for clues to the future. 

 

 

 

 

 

TheTeleprompter-in-Chief and His Job(s) Program(s)

Posted by : lizzy36

Post date: 08/31/2011 - 12:24

As we learn of plans for President Obama to address a joint session of Congress next Wednesday night it is worth noting that a single picture is worth billions of borrowed dollars. But this time... 

 

 

 

 

 

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Silver Ready To Breakout - Technicals And Fundamentals Suggest $50/oz In Early Autumn

Three key metrics which strongly suggest that silver remains far from a bubble if not undervalued. The first is silver’s real price today adjusted for the inflation of the last 31 years. Silver’s real high in 1980 was $130 per ounce – more than double the price today (see chart above). The second is the gold silver ratio which has averaged 15 to 1 throughout history due to geology and the fact that there are 15 parts of silver to every 1 part of gold in the earth’s crust. The third metric is comparing silver’s current bull market to that of the 1970’s. Silver has risen by a factor of 10 in the last 9 years – from near $4 in 2001 to over $41 today. In its bull market from 1971 to 1980, silver rose by over 3,199% or by a factor of more than 32 in just 9 years culminating in the blow off top in 1979. Today, the physical supply of silver bullion is much less than in the 1970’s. Also there is the ‘Asian factor’ and 3 billion people with growing incomes, many of whom see silver as a store of value against currency depreciation. Demand for silver in Asia has been increasing and in China alone silver demand is increasing from a near zero base. The demand was not present in the 1970’s.

Chicago PMI 56.5 Lowest Since November 2009, But Beats Expectations

That the August Chicago PMI dropped to 56.6, down from 58.8 in Julye, and the lowest since November 2009 is irrelevant. What is relevant is that this number beat expectations of 53.3, so the ripfest is on: after all, stocks move higher on worse than expected data, which should they not surge on a consensus beat. Remember: the QE3/career risk rally is on. Nothing else matters. Among the index components, Prices paid dropped from 71.7 to 68.6, Production declined from 64.3 to 57.8, same for New Orders, Backlogs, and Inventtories. The two components that did go up were Supplied Deliveries from 55.9 to 60.5 and Employment, up from 51.5 to 52.1. And now everyone looks to tomorrow's ISM, for which the PMI is traditionally a good proxy, with hope that the number will print above 50 despite every single regional Fed indicating a mid-40's print.

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Selective Interpretation Of European Newsflow Demonstrates Ongoing QE3 Promise-Driven Risk On Confirmation Bias

In yet another confirmation that absent some dramatic headlines which likely will not transpire due to all of Europe being on vacation, we will likely see another day of low volume levitation, is the over night split in action between stock futures and FX, which in turn demonstrates the selective interpretation of macro stories to validate any given cognitive bias. After dropping to overnight lows just above 1200, the futures are now preparing to print largely in the green following an overnight meltup driven, purportedly, by one single theme, namely that there is increasing German support of the EFSF after it was announced that that Germany's opposition Greens will approve new powers for the euro zone's bailout fund in a vote later in September, the party's parliamentary floor leader Juergen Trittin said on Wednesday. Per Reuters, Trittin was speaking after Chancellor Angela Merkel informed parliamentary floor leaders of the changes to the fund, which also supposedly would have bank recapitalization abilities, refuting all the rumors to the contrary from before. In other words, Europe has once again resorted to the old playbook where it floats one rumor then immediately turns around and refutes it to gauge market impact, as it did all though June and early July during the foreplay for the Second Greek Bailout. Yet ironically, while futures benefited from this, the EUR, which should be the biggest beneficiary of European stiblility actually fell substantially against Europe's safe haven currency, the CHF, on a 180 degree read of the just the same news flow. As Bloomberg explains, the CHF outperformed overnight in otherwise muted price action on concern regarding Germany’s willingness to expand EFSF commitment- bunds fall further after German cabinet backed measures to expand EFSF, allaying fears of further deterioration in Greece and Europe’s sovereign debt crisis and implying increased debt burden on Germany. On the other hand, Finnish reluctance to budge on the collateral issue then weighed down on the euro, negating all core risk transfer benefits.

Berlusconi Risks The Bond Vigilantes' Wrath, By Reneging On All Austerity Promises Ahead Of Refi-Heavy September

As previously reported, Italy is stealthily undoing its entire €45.5 billion austerity plan proposed two short weeks ago, first cutting the provision for tax hikes for high earners, and now also scrapping the proposed pension changes as Ansa reports - the pension proposal, would have excluded time at university, mandatory military service, from calculations of the retirement age and pension level. That is now gone due to a vocal opposition against every single austerity line item. Unfortunately for Italy, which has been hoping nobody would notice: Bloomberg, which has released an analysis titled "Berlusconi’s Backpedaling May Push Italy Back Toward The Brink of Disaster." It is rather self-explanatory: as a reminder the ECB is only buying Italy bonds as part of its SMP monetization expansion due to promises that Italy would slash its deficit and implement austerity. Now that this is obviously not happening, the SNB is expected to balk at future purchases of Italian debt due to Germany complaining loudly that it is supposed to carry the burden of Italy's consistent lying. Already Italian bonds have resumed their climb wider, and explains the weaker than expected BTP auction of 3 and 10 year bonds conducted yesterday.

Daily US Opening News And Market Re-Cap: August 31

• A German government spokesman said that the German cabinet has approved framework for a draft law on expanding the Eurozone rescue mechanism
• A French government spokeswoman said that France wants full application of a Eurozone agreement on Greece and no bilateral deals
• A German government draft mentioned that the EFSF will be allowed to recapitalise banks but only via national governments, which negated an earlier press report suggesting that the fund can lend to banks directly
• According to an Italian government source, the government is set to drop pension changes from its austerity package
• Strength was observed in CHF across the board as no comments emerged on curbing the currency's strength following the Swiss government's regular meeting

August ADP Private Payrolls At 91K On Expectations Of 100K, Down From Revised 109K

The perpetually wrong ADP report for August has come, printing at 91K, on expectations of 100K, and down from a downward revised 109K (previously 114K). How much of a leading indicator to Friday's NFP this is is anyone's guess: historically the ADP's error factor has been between -100% and +100%. Also as a reminder, the report does not account for the Verizon employee strike which impacted initial claims last week and which according to Goldman will likely be an addition downward wildcard in Friday's NFP.

Frontrunning: August 31

• Canada GDP prints at -0.4% on expectations of 0.0%, first contraction since Q2, 2009
• Italy Living on Borrowed Time (WSJ)
• Choice for EU: Bail Out Greece or Bail Your Banks (WSJ)
• Economy Deeply Divides Fed (Fed Mouthpiece)
• SEC Lawyer Blew Whistle Before (WSJ)
• Noda promises action on surging yen (FT) ... again... always
• White House could unveil mortgage plan next week (Reuters)
• Greek Bailout Talks Face Hurdles (WSJ)
• Panama Canal upgrade sparks US ports battle (FT)
• Japan Finds Radiation Spread Over a Wide Area (WSJ)

Canadian Economy Shrinks For First Time Since 2009; Recession Next?

Don't look know but Canada just confirmed the first signal of a recession, after its GDP printed negative (on expectations of an unchanged number) for the first time since Q2 2009, due to a drop in exports and oil output, most of it blamed naturally on "transitory" factors. Odd how the US used the transitory line for months until it all turned out to be permanentory. What, however, is truly hilarious is the continued denial to look facts in the face as confirmed by the following three Canadian sellside analysts, who seem positively giddy that the number was major miss to expectations: their take home, just like as in the case of Canadian banks having some of the lowest TCE ratios in the world: "ignore it." Perhaps when next quarter Canadian GDP prints negative again, and the economy is officially in a recession, then the delightful comedy crew of what passes for "analysts" up north will have some words of caution finally. As for whether a recession confirmation in 3 months will be negative for the same banks which are downplaying both the GDP and its risk to their near world record leverage, we leave to the far more erudite, and far less shoot-from-the-hip Globe and Mail.





Dear Ben, Please Print us More Money

Posted by: testosteronepit

Post date: 08/30/2011 - 22:30

We want you to prop up the stock markets. Everybody knows it's a Ponzi scheme that will collapse without your support. You don't want us to end up like Bernie Madoff's clients. No, Ben, we love Ponzi... 

News That Matters

Posted by : thetrader

Post date: 08/31/2011 - 05:09

All you need to read. 

Fear Sets In, Panic Begins, Ruin Perceived, Prepare for Gold $2100

 

 

 

Annual Inflation Hits 4%

There is the CPI... and then there is the MIT's billion price project which, as the name implies, tracks the prices of a billion products in real time. And according to the latter, annual inflation has hit a multi year high of about 4%. Perhaps someone can advise the talented Mr Evans that the 3% inflation he would so love to achieve... has in fact been eclipsed. At least, according to the real world. So take 4% inflation, add $2.5 trillion in "much more" easing, and what you get is only an economic Ph.D.'s guess. Alas, we are unqualified to have an opinion on the matter.

 

 

 

Chuckie Evans Goes Full QEtard: Tells Hilsenrath Fed Needs To Do "Much More" Easing

Confirming that the Fed's doves, every single one of them, are genocidal sociopaths, we have a repeat appearance from Chicago's Chuckie Evans, who first sent stocks barreling in the latest algo driven, no volume meltup, earlier, this time dodecatupling down, by telling Fed lackey Jon Hilsenrath that "we need to do much more to increase the level of accomodation"... much more as in the ~$2.5 trillion of debt that needs to be monetized in the period before Obama's desperate reelection campaign. And by "we", he means the group of 12+1 madmen bundled up in a room in the Marriner Eccles building with or without padded walls, who unlike a simple unfunded blog, believed that Q4 GDP in the US would be about 4% instead of the negative print it is about to be in a few short months. Yes sure: lets give the sociopaths-cum-Econ Ph.D's another run at destroying the world: just because the Arab Spring was not enough to demonstrate just how efficient the Fed is at toppling regimes, this time around they will make sure that the revolutionary wave sweeps across Asia, through Europe, and ends on the banks of the Potomac. Of course, if in the process it also brings with it the much desired hyperinflation that will make the US banking sector whole, who cares if a few million people die - at least Wall Street, which has long since converted its fiat wealth into gold and other real money, will be spared, go on a 5 year vacation to non-extradition Libya, then come back when the shotguns have rusted, and the pitchforks have been dulled, and pick up where they left off. Because as we all know, nobody is more "intuitive" than an Econ. Ph.D, and nobody can create greater financial innovation, aka the primary export of the US, the than someone from New York's Financial District.

Guest Post: The Rise And Fall Of US Confidence, Or Why The Fair Value Of Gold In Phase Space Is $6,000-$12,000

Today we look at a graph of confidence in the US system. The US confidence ratio represents the ratio of outstanding US Federal debt to the dollar value of US gold holdings (as reported*). No corrections for inflation should be necessary, as both terms are valued in the same depreciating dollars. We use the term confidence as the ability of the US to stretch this ratio to (by our thinking) absurd multiples was a reflection of the world's confidence in the United States--which differs from the ability to actually repay debts. Confidence level sank throughout the Depression up until the beginning of WWII, after which ascendant American power was reflected in a climbing confidence ratio up to the oil crisis in the early 1970s. Confidence sank as the US withdrew from Viet Nam and inflation rose until the price of gold rose sufficiently to restore confidence in American solvency. From 1980 to 2001 was a golden age for the US. In this time, both stock and bond markets were strong, the US currency was strong, and the only credible opposition to US hegemony disintegrated. But every bubble meets its pin, and ever since the planes hit the towers, the US power and prestige has gone into decline. This decline is marked by a rapid decline in the confidence index. How low will it go? There is a provocative looking left shoulder and head, suggesting a drop to the neckline somewhere around 2020, after which there may be something of a resurgence in American confidence. The anticipated completion of the bankruptcy head-and-shoulders formation promises to be a hair-raising event.

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India makes buying Gold easier

Posted by: Michael Victory

Post date: 08/30/2011 - 14:12

More than just "tradition".   

Who Will Protect You In These Outrageous Markets

August 30, 2011, at 2:43 pm  

by Jim Sinclair in the category General Editorial |  Print This Post |  Email This Post

Dear Extended Family,

Gold corrects $212.50, rises $50, drops $50 and today is trying to rise another $50.

That is a range of roughly $275 in just a few days. That is certainly what I call a hard chop, this time with a penchant to break out to new highs. That is exactly what I expect.

Kenny Adams points out that he feels 15 to 18 days from the first break is the fastest that this chop can resolve itself to a new high.

I have told my family, outside of myself, that there are two people who would protect them in these outrageous world markets. It would be Monty Guild for investments and Kenny Adams for speculation. Both match uncommon skill with absolute ethics.

Regards,
Jim

In The News Today

August 30, 2011, at 11:40 am
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt. –John Adams, 1826


Jim Sinclair’s Commentary

September 7th takes on strategic importance.

Euro bail-out in doubt as ‘hysteria’ sweeps Germany
German Chancellor Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe’s revamped rescue machinery, threatening a constitutional crisis in Germany and a fresh eruption of the euro debt saga. By Ambrose Evans-Pritchard
8:07PM BST 28 Aug 2011
Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country’s constitutional court rules on the legality of the EU’s bail-out machinery.
If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.
The seething discontent in Germany over Europe’s debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF’s director.
German media reported that the latest tally of votes in the Bundestag shows that 23 members from Mrs Merkel’s own coalition plan to vote against the package, including twelve of the 44 members of Bavaria’s Social Christians (CSU). This may force the Chancellor to rely on opposition votes, risking a government collapse.
Christian Wulff, Germany’s president, stunned the country last week by accusing the European Central Bank of going "far beyond its mandate" with mass purchases of Spanish and Italian debt, and warning that the Europe’s headlong rush towards fiscal union stikes at the "very core" of democracy. "Decisions have to be made in parliament in a liberal democracy. That is where legitimacy lies," he said.

More…

Jim’s Mailbox

August 30, 2011, at 11:39 am
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Euro bail-out in doubt as ‘hysteria’ sweeps Germany  
CIGA Eric

A financial shock wave, originating in Europe, is heading for the United States. It’s only a matter of time. This is why bond shorts, while correct, cannot be early.
Headline: Euro bail-out in doubt as ‘hysteria’ sweeps Germany
Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country’s constitutional court rules on the legality of the EU’s bail-out machinery.
If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.
The seething discontent in Germany over Europe’s debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF’s director.
German media reported that the latest tally of votes in the Bundestag shows that 23 members from Mrs Merkel’s own coalition plan to vote against the package, including twelve of the 44 members of Bavaria’s Social Christians (CSU). This may force the Chancellor to rely on opposition votes, risking a government collapse.

Source: telegraph.co.uk

More…




Fed Needs More Easing Until Economy Grows: Evans  
CIGA Eric

I think the proper response from the urban dictionary would be no sh*t sherlock! The markets have been signaling this for months. Yet, many maintain that the Fed leads rather than follows them.
Headline: Fed Needs More Easing Until Economy Grows: Evans
The Federal Reserve may need to be even more aggressive in its easing policies than it has been so far unless the economy shows significant improvement, Chicago Fed President Charles Evans told CNBC.
A jobless rate at 9.1 percent is "consistent with recession" while inflation is far from a worry, Evans said while defending both the central bank’s previous actions to stimulate conditions and his view that even more action along the lines of quantitative easing [cnbc explains] will be needed.
In his view, QE needs to stay in place until unemployment plunges to 7 percent or if inflation gets past 3 percent. Core inflation, which strips out food and transportation, is about 1.8 percent, though the number is 3.6 percent including the more volatile measures.
Source: cnbc.com
More…

QE3 Levitation Day 2

Yesterday we said that the "2010 Post-Jackson Hole No Volume Levitation Has Begun." Sure enough Day 2 is in the books. And anyone who recalls those fun days of deranged volatility from a week ago, when the DJIA moved +/- 400 points in a day, you can kiss those goodbye. The new no volume levitation regime is the same as the old no volume levitation regime, experienced so well between August 2010 and March 2011. The market will proceed to price in central planning in its most recent iteration of QE3 day, after day, after day, until September 21, and if nothing is announced then, until November 2, and then December 13, and so on, because the levered beta pursuit, aka "career risk" trade is now back on. It also means that the Fed will soon have to resume monetizing the $2.4 trillion in debt, well above the total excess reserves held by banks currently, that will be issued over the next year (did our good readers forget about all that debt that needs to find a buyer?). And while stocks are picking up the now standard 10 ES points per day, gold will one day very soon declare its independence from this centrally planned bullshit and just take off on its way to a self-imposed gold standard, which also means first 4, then 5, then increasingly more zeroes when expressing its price in reserve bank toiler paper terms. Incidentally, just like last year "nobody" could see QE2 happening, it may be time to put some money in Paulson & Co. which has been all but left for dead - somehow he always pulls out the centrally assisted hail mary in the last minute.

According To JPM There Is Now A "Better-Than-Even Chance" Of Fed Action On September 21

For now it was just Jan Hatzius calling for QE3 now if not sooner. With the addition of JPM to the list of banks now implicitly expecting (read demanding) QE3, it is now quite clear how Wall Street feels - after all someone has to pay those Wall Street bonuses - it sure won't come from M&A activity, underwriting of Chinese IPO frauds, or trading volume. Here is the key sentence from a just released note by JPM's Michael Feroli: "We believe the minutes lend themselves to our view that there is a somewhat better-than-even chance the Fed takes action at the next meeting to increase the average maturity of assets on their balance sheet." Keep an eye on the market tomorrow for confirmation: a third day of the same low volume meltup we have seen this week should make the open QE3 question into case closed.







Harvey Organ, Tuesday, August 30, 2011

Gold advances to $1826.70/silver to $41.40/Silver Heads into First Day Notice Tomorrow morning

Harvey Organ's - The Daily Gold and Silver Report - 1 hour ago

Good evening Ladies and Gentlemen: I hope you all saw my amended commentary early this morning as the CME are providing details on silver and gold inventory movements later and later.  Normally we get the data at around 2 pm. At exactly 6: 14 pm the CME sent down the inventory data for today.   The data will be critical as we enter first day notice on silver tomorrow.  Late tonight I will get

Guest Post: Russia and China's Energy Dispute and the Struggle for Eurasian Dominance

China’s voracious appetite for energy from anywhere has led most oil-producing nations to attempt to feed the dragon, including Russia. But a curious situation has developed as regards Russian oil exports to the Celestial Kingdom, underlining that the two nations, which fought for global supremacy over the Communist movement for four decades, remain at best, “frenemies.” According to Chinese customs reports, last month oil imports from Russia fell by nearly half. Not so, Rosneft says, stating that deliveries are proceeding through the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline at their normal levels. Russia is now China’s ninth largest source of oil imports, with Saudi Arabia first, Iran second and Angola third. In trying to read the tea leaves in the contradictory statements emanating from Beijing and Rosneft, Russian analysts believe that China is sending Moscow a not so subtle signal that it can do without Russian imports.

Fannie, Freddie Parent Files Strawman Objection Against BAC Settlement - Sole Purpose Is To Strengthen The Settlement

The FHFA filing an objection to the Bank of America settlement? Forget about it. After all should BAC implode upon having to fund another $50 billion in mortgage putback claims, and Countrywide have to be spun off and nationalized, it would simply mean that more capital would flow away from the already insolvent GSEs and to a totally new branch of taxpayer funded RMBS. Which is why are confident that the latest objection filed against the BAC settelement is merely there to weaken the case, or as Manal Mehta puts it: a Cover Your Ass filing because "they’ve pre-determined the conclusion and then will do the bare minimum discovery until they can jump ship and undermine the efforts of the rest of the objectors." Why else would anyone file a "conditional objection" whose sole purposes is " to reserve its capability to voice a substantive objection in the unlikely event that necessity should arise." Unlikely? Obviously this is Bank of America's higher power interest already doing all they can to prevent an out of control situtation getting even worse. Which after all is the whole point of why the Fed, Pimco, BlackRock et all filed the lawsuit in the first place: to ring-fence the total amount of cash outflow claims, instead of allowing Bank of America to experience death by a thousand lawsuits. In this regard, tonight's FHFA filing is nothing more than a wolf in plaintiff's clothing doing what they can to weaken the case against undoing the settlement.

Walter Williams On The 2012 Election And Sound Money

We can blame politicians a little bit, but the bulk of the blame lies with the American people. That was kind of an epiphany for me. During the 1980s, I would occasionally have lunch with Senator Jesse Helms from North Carolina. He knew that I was highly critical of agricultural subsidies, handouts to farmers. Something Jesse Helms told me at one of our luncheons made me realize some things I had not realized until then. He said, “Walter, I agree with you 100% that these farm subsidies ought to be eliminated.” But then he asked, “Can you tell me how I can remain the senator from North Carolina and vote against them? If I do what you say, I would be voted out of office.” Applying his observation today, we can note that the biggest expenditures by the federal government are Social Security, Medicare, Medicaid and prescription drugs. Along with other entitlements, these expenditures amount to almost 60% of the federal budget. The beneficiaries of these programs vote in large numbers. Politicians who talk about cutting these programs are going to run into trouble. We have to get the American people, as much as politicians, to respect the Constitution.

Guest Post: Mr. Cheney’s Victory Lap

A lot of people—children of the ’70’s, I suppose—claim that judgment is a bad thing: “Don’t judge! You have no right to judge!” is their mantra. They insist that we as a society have no right to judge how they live, or more importantly what they do.  A lot of other people have taken up the same slogan, and adopted it as their own: People like Dick Cheney—like Monsanto and DuPont and BP, who poison us with impunity—like the oil and gas companies carrying out “fracking”, which is causing earthquakes and flammable water on the East Coast—like the TBTF banks and the prop desks front-running their clients, or illegally foreclosing on homeowners—in short, people near the top of our social pyramid.  They have adopted the non-judgmental slogans: “Don’t judge! You have no right to judge! It’s not illegal! We’re not breaking the law! So don’t judge! Don’t judge!” they yell and scream as loud as they can. They seem so convincing, these slogans: It’s tempting to do what they ask—to not judge. Because judgment is hard. It’s far easier to passively accept a situation—to not pass judgment—to simply let it be—than to stand up, make a judgment, and then say it out loud.

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