Here Is Why Everything Is Up Today - From Goldman: "Expect The New QE As Soon As April"
Confused why every asset class is up again today (yes, even gold), despite the pundit interpretation by the media of the FOMC statement that the Fed has halted more easing? Simple - as we said yesterday, there is $3.6 trillion more in QE coming. But while we are too humble to take credit for moving something as idiotic as the market, the fact that just today, none other than Goldman Sachs' Jan Hatzius came out, roughly at the same time as its call to buy Russell 2000, and said that the Fed would announce THE NEW QETM, as soon as next month, and as late as June. Furthermore, as Goldman has previously explained, sterilization of QE makes absolutely no difference on risk asset behavior, and it is a certainty that the $500-$750 billion in new money (well on its way to fulfilling our expectation of a total $3.6 trillion in more easing to come), in the form of UST and MBS purchases, will blow out all assets across all classes, while impaling the dollar. Which in turn explains all of today's action - dollar down, everything else (including bonds, which Goldman said yesterday to sell which we correctly, at least for now, said was the bottom in rates) up. Finally, as we said, yesterday, "In conclusion we wish to say - thank you Chairman for the firesale in physical precious metals." Because when the market finally understands what is happening, despite all the relentless smoke and mirrors whose only goal is to avoid a surge in crude like a few weeks ago ahead of the presidential election, gold will be far, far higher. Yet for some truly high humor, here is the justification for why the Fed will need to do more QE, even though Goldman itself has been expounding on the improving economy: "The improvement might not last." In other words, unless the "economic improvement" is guaranteed in perpetuity, the Fed will always ease. Thank you central planning - because of you we no longer have to worry about either mean reversion or a business cycle.Everything Up As Gold/Silver Outperform
Between our overnight discussion of the size of the Fed's QE and Goldman's call for QE
as soon as April, risk assets all synced and surged today as the USD
gave back most of the week's gains. The S&P 500 managed to close
above 1400 for the first time since June of 2008 on decent volume - even
as AAPL closed down 0.7% (and -2.5% from the $600 threshold it peered
over) as financials once again took the lead. BofA is
now up 13.6% from pre-JPM-dividend news (more than double its peers)
while GS and C languish up only around 2% from that point. High-yield credit markets were nothing like as QE-ebulient as stocks today
as investment grade outperformed (more up-in-quality rotation) and the
last 45mins actually saw active selling in HY and HYG while IG and the
S&P leaked higher. Treasuries steepened very modestly with the long-end maybe 1bp higher in yield close-to-close but the 7-8bps compression off overnight high yields is noteworthy and brought the broad risk asset complex back in CONTEXT with stocks (after yesterday's dislocation). The USD lost around 0.4% from late last night
on the day (though still stronger on the week) as EUR and JPY tracked
it broadly but higher yield AUD outperformed handsomely (more QE-funding
currency needed). Commodities bounced nicely with Copper the day's winner followed closely by Gold and Silver (up around 0.9%) and Oil practically unchanged after dipping over 1% on the SPR chatter and recovering on the denial. VIX ended
the day (spiking) higher and the term structure very slightly flatter.
After spiking Friday and Tuesday (as we broke the uptrendline) average
trade size has drifted notably lower and was its lowest in over a week
today suggesting less institutional buying here.Summing Up All That Is Wrong With Greece
We
are not picking on Greece today but in the shadow of Lagarde's (and
Thomsen's) comments on how shiny everything is in Greece but risks
remain, we thought this anecdote-and-analysis discussion between RGE's
Megan Greene and CMC's Michael Hewson was so timely as a follow-up to
our previous discussion in December.
From her experience in a coffee-less and book-less cafe/bookstore in
Athens to a succinct perspective on debt sustainability, competitive
issues, elections, and implementing structural reforms, the discussion
is a quick-and-dirty way to grasp that it's all about the politics and
less about the economics. Critically Green points out the much
more important 'change that the Greeks can believe in' is the
structural reforms - and unfortunately there really has been very
little progress. Simply put, until Greece sees a whole new political class capable of implementing the kind of structural reforms necessary to improve Greek competitiveness, Greece will never reach sustainability. This leads to her conclusion (spoiler alert) that what it will take is for Greece to exit the Euro.
Quite unapologetically, Megan notes the political 'spring' in the
youth that is building in sound and fury and feels that this new
political class will not succeed until Greece has hit rock-bottom -
though this could take a while as mindsets shift from Euro-friendly to
Austerity-unfriendly with perhaps post German elections in 2013 as a catalyst with an amicable divorce.
As a bonus, Greene also discusses LTRO, the Spanish elephant in the
room, and the new fiscal compact's procyclical and toothless structure. Everything you wanted to know about Europe but were afraid to read...The Next Crisis
Admin at Jim Rogers Blog - 48 minutes ago
It's only a matter of time before the next crisis comes. Maybe by the end
of this year, probably by the end of next year. -* in a recent interview*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
Gold and silver rebound/gold and silver shares languish/Spanish house prices fall again
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago
Good
evening Ladies and Gentlemen
Gold closed up today by $32.69 to $1659.10 Silver rose by 78 cents to
$32.69. So much for the raid orchestrated these past several days.
However I have to alert you that the gold shares were again weak
considering the big rise in the precious metals which indicates another
raid will be upon us shortly. Let us head over to the comex and assess
trading.
The
Gold holding near $1640
Trader Dan at Trader Dan's Market Views - 4 hours ago
The Yellow Metal attracted some short covering and some buying related to
bargain hunting in today's session as apparently buying was of sufficient
size to convince some of the shorts that the market was through going down
for right now. After a drop of $85 in a few days, some decided that it was
time to ring the cash register and grab a few profits.
It looks like a few light stops were run once the market took out $1660 but
after those were filled, price retreated a bit lower and is currently below
that level.
For me to become convinced that a short term bottom is in this market... more »
Bank of America: "It's Not Your Mother's Tampon"
Dave in Denver at The Golden Truth - 7 hours ago
*This bank is like the world's worst-behaved teenager, taking your car and
running over kittens and fire hydrants on the way to Vegas for the weekend,
maxing out your credit cards in the three days you spend at your aunt's
funeral. They're out of control, yet they'll never do time or go out of
business, because the government remains creepily committed to their
survival, like overindulgent parents who refuse to believe their
40-year-old live-at-home son could possibly be responsible for those dead
hookers in the backyard. *- Matt Taibbi, Rolling Stone
I've written several posts i... more »
Charting The Legacy Of The Baby Boomers
While
it is difficult to properly attribute blame for the collapse of the US
economy, which commenced in the early 1980s, on either the Fed's
policy of easy money starting with Alan Greenspan (and terminating with
today's statement by Goldman that merely a suggestion of "not easing"
may be equivalent to "tightening" - a symptom of a terminal junkie),
or the resultant self-indulgent lifestyle of the maturing baby
boomers, one thing is certain: the paradigm downturn of the United
States began in the early 1980s. And here we are willing to break the
cardinal rule of statistics and assume that correlation does imply
causation. Because the 4 simple charts below don't lie: the US economy,
as represented by its Balance of Payments, the profligacy of the US
consumer, the massive expansion of consumer leverage, and the collapse
in US manufacturing jobs, and specifically its current near-terminal
state, is as much as legacy of the baby boom generation's actions (and
lack thereof), as of everything else that has already been mulled over
and scapegoated an infinite number of times in both the mainstream and
fringe media.Muppet-Gate Meets Blank-Berg
In one of the strangest headlines from Bloomberg today, MuppetGate takes on a new life...
*MAYOR BLOOMBERG MEETS WITH GOLDMAN EMPLOYEES AFTER SMITH OP-ED
Caption Contest seems appropriate...
Guest Post: Gridlock In DC
The first session of this 112th Congress was spent with Democrats and Republicans at loggerheads over the debt ceiling, taxes, spending cuts, the deficit super committee, appropriations bills and finally the extension of unemployment compensation and a two-month extension of the payroll tax cut. Standard and Poor's downgrade of the United States' federal debt was due in part to all the haggling over how, and actually whether, to reduce the debt. No One Is Willing to Pay the Political Price to Cut Spending This year Obama asked Congress for, and was given, an additional $1.2 trillion of borrowing authority, which will increase the debt limit to $16.4 trillion, just enough to get him past the 2012 election. It could be close, however. If budget projections prove to be overly optimistic, Obama could face another cliffhanger over a further increase in the debt ceiling in the midst of the presidential election in November. How embarrassing to have to say "re-elect me – and by the way, I need to borrow some more money to pay this month's bills."
The Iceland Financial Renaissance Miracle Continues
When it comes to the New Normal, there are just two precedents: complacent and doomed debt slaves, such as Greece, which continues to voluntarily hand over any and all of its real assets to the vampiric banking oligarchy in exchange for simply being the member of a doomed club, while trembling at constant threats of fire and brimstone if it dares to split away from its monetary parasites (and where unemployment rises by 3% in one quarter), or the rare success story such as Iceland, which showed the bankers a middle finger, took the red pill and disconnected from the globalization matrix. And while even Bloomberg recently extolled the virtues of the Iceland "case", which will likely be solitary until the entire ponzi scheme comes crashing down, we are heartened when we observe all incremental milestones of further economic and financial success by the one country that dared to call the banker bluff, and won. Such as this press release from the IMF.About Those Foreign-Law Greek Bonds...
With
Greece seemingly well-and-truly in the mainstream media's rear-view
mirror, we thought it useful to go over a few details that are
'evolving' as we approach the CDS auction and foreign-law bondholder
participation deadline. In a nutshell, there are now seven (count them seven) classes of debt in the Greece capital structure
ranging from Old GGB holdouts to Troika- and EFSF-subordinated 'loans'.
Critically though, just as we have written extensively, it is the size
of the holdouts that will become a growing headache for the European Greek government. As BNP notes today, there are at a minimum EUR2.5bn but potentially up to EUR11bn of holdouts that leaves the Hellenic Republic with the chance of achieving 100% participation practically impossible and some very difficult choices between a disorderly failure-to-pay default on these holdouts (with all the ugly ramifications of out-of-control bankruptcy and litigation) or 'unfairly' pay this 'small' group of desperadoes out as normal (i.e. pay interest and principal to Par at maturity - no haircuts). This is exactly the 'blocking-stake-Foreign-Law-bond' strategy we suggested
that hedge funds would undertake and it appears successful given the
record price differential that now exists between Greek- and Foreign-Law
bonds.Dear CIGAs,
Of all the videos ever produced the following one is a must see by everyone.
On an unrelated note, a new interview with Eric King of www.KingWorldNews.com will be released this evening around 10pm EST.
Regards,
Jim
Go confidently in the direction of your dreams. Live the life you have imagined. –Henry David Thoreau
My Dear Friends:
I have done an interview with Eric King of King World Radio. Our subject is what will be resolved here and now in the gold market and why.
I anticipate the interview to be available by 10pm this evening.
If you have the time I encourage you to listen to it.
Regards,
Jim
Jim Sinclair’s Commentary
It is time to turn the heat up on the Brits. It is not unjustified, but slowly the vigilantes are finding their way to the June dollar event.
Fitch Puts U.K. Debt on Negative Outlook Days Away From Budget Gonzalo Vina, ©2012 Bloomberg News
Thursday, March 15, 2012
March 15 (Bloomberg) — Fitch Ratings said Britain risks losing its top investment grade because of its limited ability to deal with shocks, days before Chancellor of the Exchequer George Osborne will present his annual budget.
Fitch changed the outlook on Britain to "negative" from "stable," indicating a "slightly greater" than 50 percent chance that the AAA rating will be reduced within two years, the company said in a statement in London late yesterday, citing the weak economic recovery, high debt levels and threats from Europe’s debt crisis. Osborne will meet coalition partners later this week to agree on a budget he will present on March 21.
The decision "reflects the very limited fiscal space to absorb further economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery," Fitch said.
While the warning is a blow to Osborne’s strategy of implementing the biggest squeeze on government spending since World War II, it may strengthen his hand in negotiations with Liberal Democrat coalition partners, who want him to cut taxes to help the poorest workers.
Treasury minister Danny Alexander, a Liberal Democrat, said the announcement is a "salutary warning to those who think it is possible to loosen the purse strings."
More…
Jim Sinclair’s Commentary
India has agreed to settle Iranian oil costs partially in gold.
Washington might have just realized the extreme move away from the dollar as a settlement mechanism and gold’s move towards the system as a currency of choice.
US threatens India over Iran oil
Jim Sinclair’s Commentary
This got posted on the official CFTC site? Someone is going to be looking for a new job.
Let us see if it is there this evening.
From: Z A N
Organization(s):
JPMorgan Chase
Comment No: 57019
Date: 3/14/2012
Comment Text:
Dear CFTC Staff,
Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.
I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.
On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.
There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke’s speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.
As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.
It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America’s best kept secrets. Please do not allow this to turn into another Enron.
Kind Regards,
-The 1st Whistleblower of Many
More…
Jim Sinclair’s Commentary
Among the hype on good economic news this seems to have fallen through the MOPE/MSM cracks.
You have to love the expected/unexpected smaller/larger comments from the wizards who are in charge of expectations and sizes.
Current-Account Deficit in U.S. Widens to $124.1 Billion By Timothy R. Homan on March 14, 2012
The current-account deficit in the U.S. widened more than forecast in the fourth quarter to $124.1 billion, the biggest in three years.
The gap, the broadest measure of international trade because it includes income payments and government transfers, grew 15 percent from a revised $107.6 billion shortfall in the prior quarter that was smaller than initially estimated, a Commerce Department report showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a $115 billion fourth-quarter deficit.
Imports (USTBIMP) of goods may keep rising as an improving job market underpins consumer spending, and businesses replace outdated equipment. The overall balance of payments deficit is also a reminder of U.S. dependence on foreign investors for funding.
“A widening of the balance just tells you about the relative growth rate of the U.S. compared with other economies,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “There’s a fairly good chance that the deficit will widen again because imports are on track to outpace exports.”
The gap for all of 2011 widened to $473.4 billion, or 3.1 percent of gross domestic product, from $470.9 billion a year earlier.
More…
Jim Sinclair’s Commentary
Location of storage is the key element in owning physical gold.
Real gold insurance is what you have in your hand unless you are willing to go and live with your gold. The latter may not be a bad option.
Singapore Seeks To Be Asian Bullion Hub With Tax Free Gold and Silver
By Mark O`byrne March 14, 2012 8:49 AM EDT
Gold’s London AM fix this morning was USD 1,662.00, EUR 1,271.61, and GBP 1,057.93 per ounce.
Yesterday’s AM fix was USD 1,694.75, EUR 1,291.44and GBP 1,082.63 per ounce.
Gold fell 1.7% in New York yesterday and closed at $1,676.10/oz. Gold fell in Asia prior to further falls in Europe which has gold now trading at $1,656/oz.
Fed Chairman Ben Bernanke offered no insight as to whether there will be another round of QE and the Fed said the economy was "expanding moderately" though growth still faced significant downside risks.
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Gold has broken below $1,660/oz to its lowest since January 25. Gold is now below the 200-day SMA at $1,681.08/oz as well as the 38.2% Fibonacci retracement from September’s record to December’s lows.
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Let the dollar do the talking where gold is concerned –Master Kenny Adams
NEAR TERM:
80.80/81.50: MAJOR. At present, this is holding as maximum upside potential for the near term. If reached, this level is sufficient in strength to return the USDX to a major bear trend.
INTERMEDIATE TERM:
82.15/83.80: MAJOR, with numerous major overlays inside this bracket. Its core holds at 82.20 / 83.20. A close above 81.70 would be expected to continue on to a test of this level.
83.10/84.25: MAJOR, and here occurs another partial overlay, making for three major overlaid brackets between 82.15 and 83.80. A move up to 82.15 or above – although not currently supported internally, would be expected to result in exhaustion and a very rapid collapse.
IN SUM:
We do not expect the USDX to close above 81.50, before exhausting the upside and returning to its longer term bear trend, except for the conditions listed above.
Jim Sinclair’s Commentary
This is compliments of CIGA Peter the Great.
Emotional Clamour, Extreme Concentration, And Feel For Markets CIGA Eric
Liquidity is lifting all boats. Relative buoyancy in this case rather than being defined by fluid pressure and gravity are defined by human behavior and capital flows. At times the equity market is a clear winner, while others the gold miners are quietly out perform. I characterize it as quiet because the media rarely focuses on gold and the gold shares.
Close your eyes and focus your mind to the rhythms of the market. The markets, a collection of human behavior based on profit motive, are alive. They breathe within cycles of extremes. I have a small commentary schedule tomorrow that talks about "oversold" and negative messages, but until then I’ll just say that investors see what they want to see. This is why the vast majority fail in this business.
The gold shares are pushing relative extremes. Soon exhale will turn to inhale, thus, catching the majority on the wrong side of the trade. Wyckoff, Livermoore (the boy plunger), Seligman, and yes even Jim, succeed because they understood that markets were alive.
Gold Shares to S&P 500 Ratio:
Hey Eric
Thanks for the article today on false gold shares breakdown….will be a particularly interesting one to monitor.
The "emotional clamour" regarding anticipation of further plunge seems to be in direct contrast with very volatility in general equity market sentiments (i.e. high complacency?) – does that seem a contradiction to you, given the fairly close links between miners(esp jnrs) and general market of late?
best regards
R
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