Eurozone Crisis: The Idea Of Printing More Money And Buying Worthless Bonds Instead Of forcing People To Go Bankrupt Is Ludicrous

Admin at Jim Rogers Blog - 1 hour ago

The idea of printing more money and buying worthless bonds instead of forcing people to go bankrupt is ludicrous. That's how you destroy an economy, that's how you destroy a financial structure and that's how you destroy the euro. No matter what projections you look at all of them show the debt in these countries will be higher in five years not lower and that's destroying the economy of Europe and the euro. Greece should stay in the euro, but make them go bankrupt, make them stop spending, make the people who lent the money to the wrong people lose money. The only thing that works... more »

Margin Hikes help derail gold; HIgher Equities also hurt

Trader Dan at Trader Dan's Market Views - 9 minutes ago

I was a bit surprised last evening NOT to see some selling related to the margin hikes announced by the CME Group yesterday for carrying futures contracts in gold. Eventually however, the selling did kick in. Along with the upside move in the equity markets in today's session, that was enough to take some of the wind out of the gold market and bring it back down to earth for a bit. We have had a nice run higher which was threatening to get out of hand due to the very steep angle of ascent being created on the price chart ( remember what happened to silver earlier this year) so some ... more »

The Death Cross Is Back

Two things should stick out at the reader upon perusing the chart below. First, inversely from top to bottom, what is rather disturbing is that the average trade block size in ES has tumbled over the past week, which we believe is indicative of the massive deleveraging hedge funds have been forced to undergo in order to not be torn to shreds by the massive volatility in the markets in the past 10 days. It also means that the marginal impact of a far smaller trade is proportionally higher than it would have been back in May when the average block size was at the highest for 2011, concurrent with NYSE margin debt and net leverage hitting fresh post-Lehman highs. As such it means that we should expect to see a 50 S&P point yoyo market for quite a bit or until such time as hedge funds relever once again, and take the marginal pressure off the momentum creating and chasing HFT machines. Another notable observation: the 50 DMA is about to drop below the 200 DMA. Another name for this phenomenon? The Death Cross. The last time this happened was back in July 2010, just weeks before the first occurrence of the Hindenburg Omen back in August 2010 which pushed the market to its lows for the year, which, among many other factors forced Bernanke to launch QE3 two weeks later. Is the Death Cross the precursor to a comparable chain of events this time around? We shall see as soon as August 2th.

Listen To Obama Convey The Teleprompter's Latest Thoughts On The Economy And Jobs

Yep. It's that time again. Sorry, just audio this time.

Some Perspectives On "Surging" Insider Buying

Based on repeated soundbites played on Comcast's financial comedy channel one would be left with the impression that corporate insiders have completely stopped managing their companies and all they do is sit feverishly in front of E-Trade, and punch F5, buying up their own stocks with relentless abandon. Alas, this is about as far from the truth as BLS data from reality.  Below are four charts that present the full picture.

"Horrible" 30 Year Bond Auction Prices With Unprecedented 11 bps Tail

The just completed auction of $16 billion in 30 Year bonds, was, as Rick Santelli said, "a failure". And while this may be a little dramatic, this was without doubt one of the ugliest 30 Year auctions ever seen. The 30 year priced at 3.75%, a huge 11 bps tail to the When Issued which was trading at 3.64%, the Bid To Cover plunging from 2.80 to 2.05, the lowest since February 2009, and, most shockingly, the Indirect Bidders Imploded to a paltry 12.2%! Those wondering if Chinese posturing would led to anything more than just jawboning have their answer. The Indirect tendered bids were just $3 billion or about 20% of the total auction size, which resulted in a $2 billion take down. It was so bad that the Directs were for the first time in 30 Year history greater than the Indirects. And yes, while the yield was close to record low it won't stay there especially if as is now expected, August 26 will see the BEA report a second GDP revision of ~0.6% at 8:30 am, which will be promptly followed by Bernanke's 2011 Jackson Hole address. And so the yoyo continues: what today's auction has proven is that going forward the Fed will be forced to crash the market every day that there is a Treasury auction, while ramping stocks on days when Treasury does not need to fund its borrowing binge.

Visualizing The Halt Of America's Largest Publicly Traded Company Due To A HFT Glitch

Today, at 10:33:37 am, America's largest publicly traded company, Exxon Mobile (sorry, any surge in AAPL to the top market cap position in the US is truly the only realistic use of the word "transitory" in the past year) was halted after an errant trade printed outside of normal trading parameters and freaked out the artificial regulatory limiters. Naturally the trade was DKed, but for a few minutes one of the bellweather American stocks was out of commission due to the post-modern equivalent of a fat finger: an algo that was programmed to aggressively hit any bid, well below the NBBO. Luckily, this happened well after the rumor of a short selling ban was implanted in the traders' psyche, and markets were largley higher. Had XOM been halted as the S&P was down several percent, who knows what panic would have gripped the stock market forcing many to dump their holdings of viable stocks. And this will continue for as long as the SEC does not comprehend that the fact that US capital markets are broken is well and fully understood by most retail investors and which is why they have pulled over $160 billion from equity mutual funds since 2010.

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