Gene Arensberg: Silver close to a 'short-murdering rocket launch'

 

 

The hidden dangers in safe havens

So what exactly is the "intrinsic value" of a dollar bill or a Treasury bond?

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Mark O'Byrne: Venezuela's gold withdrawal threatens short squeeze

 

J.S. Kim: How to smack down the global banking cartel with gold and silver

 

 

Putin calls U.S. 'parasite' as Russia gorges on U.S. debt

 

 

End Game Approaching in Europe: No Way Out But Debt Restructuring 

Report: Crop losses in Texas top $5 billion.

 

 

A Big Bounce, Ounce By Ounce, and Gold Takes Off




Core Wholesale Inflation Up Most in Six Months




0% Interest Rates Locks in Inflation 




Fitch Keeps US at AAA

 

 

Illinois to feed Asian carp to the poor

 

 

Net Net: Less Than 2% From Joining The Rest Of The World In A Fresh Bear Market

The week is finally over, and the numbers are in: after narrowly avoiding the "bear market" two weeks ago when we dipped by 19.63%, or about two ticks away from the dreaded 20% correction, the subsequent dead cat bounce fabricated in no small part courtesy of Europe's unprecedented intervention in all markets, both bond and stock, has ended, and we are back to being under 2% away from reentering a Bear Market (and closing at the Lows of the Day). That however will not be the end of the world: as the chart below shows America will actually be the last major market to enter join the Bear party, so little shame there. As the second chart from Rosenberg today shows all the developed countries plus all the BRICs are already there. We expect an ongoing selloff into the last week of August (no need to remind what happens then), at which point the market may get a surprise or two. In the meantime, we depart with Rosie's words: "the US economy is slipping into recession, Europe is as well, and HP served up a reminder that this earnings season has not been the slam-dunk positive reporting period posted in the prior eight quarters. But disciplined investors who took our advice should not be feeling much pain at all." Who laughs last again?

Guest Post: A “Braided Basket” Trade On The Apocalypse

So we all know that gold prices and UST 10Y yields are as high, and low, respectively, as they have ever been. This is nothing more or less than human adrenaline overriding reason and logic, driving return expectations to the distribution of max entropy. It’ll pass. Sometimes it makes sense to fight the crazy impulses of greed and fear. But often this gets you creamed in the center. Sometimes it doesn’t. For those times, the prices of straightforward hedges like 10Y Ts and gold make them very unhedge-worthy. There is no sense in jumping on trades that already have the risk premium baked in. The alternative is to ride the apocalypse with an eye on the relative mispricing of extremal points. I’m creating what I call a braided basket to do this. I’ll take two pair trades and go short the rapier points of the apocalypse and long something correlated, but underperforming it. In this way I’ll catch some hedge on tail risks on my core book due to the darkening outlook. At the same time, I’ll catch some cover when people come back to their senses. Why braided? Check out the charts, and see how the pairs interweave.

In The News Today

August 19, 2011, at 3:10 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

John Williams’ value to you lies not only in his economic one liners, but rather in the essays that accompany his service.
Consider subscribing.

- Inflation Spreads Throughout Economy as Annual “Core” Inflation Jumps Again
 
- Consumer Inflation at 33-Month High
 
- July’s Annual Inflation: 3.6% (CPI-U), 4.1% (CPI-W), 11.2% (SGS)
 
- Retail Sales Gain Vanishes, Net of Inflation
 
- Unusual Heat and Japanese Auto Assembly Parts Boosted Production
 
- Housing Activity Remains Moribund

www.ShadowStats.com





Jim Sinclair’s Commentary

Banksters become trillionaires from TARP and other government programs as the common man suffers on.
How will history see this period? The end of America and Europe as we knew them? The dawn of the new Dark Ages with the class system of only serfs and banksters and their bodyguards? Total spiritual bankruptcy in the Western world as the foundation for Total Monetary Bankruptcy of the Western world? The rise of China as the dominant world nation? A five currency world made up of Gold, the Swiss, Singapore dollar, Cando and Yuan?
There is much more at stake here than just your finances.

California’s unemployment rate climbs two-tenths of a percentage point in July, the U.S. Department of Labor says, to 12%. The state has the second-highest jobless rate in the nation, exceeded only by Nevada at 12.9%.


Job seekers look at job listings on a bulletin board at the One Stop Career Link Center in San Francisco on Wednesday. The state’s unemployment rate ticked up two-tenths of a percentage point in July to 12%. (Bloomberg News / August 17, 2011)





Jim Sinclair’s Commentary

We are getting an early start this week with 2 banks failures on top of yesterday.

August 19, 2011
 
These links contain useful information for the customers and vendors of these closed banks.
Lydian Private Bank, Palm Beach, FL
Public Savings Bank, Huntingdon Valley, PA
http://www.fdic.gov/

Jim’s Mailbox

August 19, 2011, at 12:11 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Hi Jim,

Headline on Yahoo Finance:  Market Sell-Off… Blame Europe.
Mope at its finest.

Thanks for everything!!!!

CIGA Ron



It May Feel Like 2008, But It’s Undeniably Different
 
CIGA Eric

Money flows in the US Treasury Bills (Tbills), US Treasury Bonds (Tbonds) and gold illustrate why this is not simply a repeat of 2008. Money surged into Tbills and Tbonds as the banking crisis was introduced to the public in the fall of 2008. The positive half parabolas (blue) from 2008.03 to 2008.12 reflect investors’ safe haven preference for Tbills and Tbonds over gold.
The definition of safe haven, however, has changed in 2011. Money, seeking refuge from the evolving sovereign debt crisis since the fall of 2010, has been aggressively moving into gold. The negative half parabolas (red) illustrate this preference over Tbills and Tbonds as the crisis intensifies. Gold despite almost daily assurances from talking heads that everything remains the same has become preferred safe haven option in 2011. It may feel like 2008, but safe haven money flows suggest that it’s undeniably different.
U.S. Treasury Bonds Total Return Index (USTBTRI) AND USTBTRI to Gold Ratio

Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio

Headline: Is This Lehman Again? No, But It Sure Feels Like It
More than whether the European debt crisis is exploding, or if the US is re-entering a recession, or what the Federal Reserve’s next move is, the markets want to know one thing: Is this another Lehman?
No word makes investors’ blood run colder than “Lehman”-a reference, of course, to the Wall Street titan whose fall in September 2008 triggered the worst financial crisis since the Great Depression.
The short answer during the stock selloff Thursday was no, this is not a repeat of the scenario that ultimately sent the economy into a sharp recession and nearly capsized the entire global economy.
That, at least, was the view of market veterans of all stripes. On trading floors, though, the Lehman denials carried less weight, sending the major averages down as much as 4 percent just as a relief rally inspired hopes that perhaps the worst of the two-month slide was over.

Source: finance.yahoo.com

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Japan Urges G-7 Coordination on Markets
 
CIGA Eric

“Take all necessary measures to support financial stability and growth.” In other word, do whatever it takes to kick the can down the road. That is, until market forces remove or destroy the can. After that, central planners will be pushing on a string to execute those ‘whatever it takes’ policies.
Headline: Japan Urges G-7 Coordination on Markets
Japan called on Group of Seven nations to work closely to counter market turmoil and Asian officials sought to calm investors as stocks slumped on concern the U.S. recovery is faltering.
The G-7 needs “very close cooperation in coming weeks,” Japanese Finance Minister Yoshihiko Noda said in Tokyo, where the Topix index fell to a two-year low. Hong Kong financial official K.C. Chan urged investors to “stay calm” and not be “spooked by the market,” as the Hang Seng Index slumped 3.1 percent. In Beijing, Vice President Xi Jinping said his nation will avoid an economic hard landing.
Plunging equity markets are crushing consumer and business confidence, worsening the outlook for a global economy already hampered by the debt burdens of developed nations. Speculation that European banks may have insufficient capital and signs of weakness in the U.S. economy are helping to drive a stock rout that returned to Asia today.
“Business confidence is tailing off and global growth slowing, and Europe’s debt situation appears to be getting worse and worse without any coordinated policy response,” said Matt Riordan, who helps manage almost $6.6 billion in Sydney at Paradice Investment Management Pty. “The worst case is that you go back to a 2008-type financial crisis.”

Source: finance.yahoo.com

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