For the first time in what may be ages, a phenomenon that has become near and dear to anyone who trades gold, and which at best elicits a casual smirk from those who observe it several times daily, we find that the WSJ has finally picked up on the topic of the endless daily gold slam down, where the seller in complete disregard for market disruption (because in a normal world one wants to sell any given lot without notifying the market that one is selling so as to get a good price on the next lot... but not in the gold market where the seller slams the bid with reckless abandon) ignores market depth and in a demonstration of nothing but brute price manipulation force, slams every bid down just to demoralize further buying. Naturally, that this simply provides buyers with a more depressed price than is "fair" is lost on the seller, but not on the buyers who promptly bid up the metal as attempt to demoralize buying end in failure after failure. Yet it is peculiar that today, for the first time, the intraday gold slam down has finally made the MSM. To wit: "The CME Group Inc.’s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m. EDT. The sale took out blocks of bids as large as 84 contracts in one fell swoop and cut prices down to $1,648.80 a troy ounce. The overall transaction was worth more than $1.24 billion... Gold traders buzzed with speculation that the transaction was an input error — a so-called “fat finger” trade. “Or a Gold Finger as it might be known in the bullion market,” traders at Citi joked in a note to clients." Well, no. It wasn't.
The pastel-wearing President of TrimTabs proffers an entirely non-perfunctory prose explaining why he believes we are now due for a stock market decline. Echoing our thoughts, Charles notes that "It's the Federal Reserve that controls the market, it's their money, they're the boss, we play with their money that they print or stop printing". Sadly true (especially for all the highly-paid economists and strategists out there), the pre-2009 drivers of equity performance (specifically new or excess savings) are no longer so; since the initial QE1 this has not been the case and providing us with a thoughtful history of equity market valuations relative to the various QE-efforts over the past few years - especially when compared to income growth and/or macro-economic data - provides just the color required to comprehend this essentially a obvious thread of reality that merely four years ago would have been denigrated to the tin-foil-hat-wearers of the world. Real-time data says that wages and salaries are barely growing above inflation, Europe is a disaster, and the emerging nations are seeing slowing growth; without the Fed's new money where will cash come from to drive stock prices higher? The question is, assuming the Fed will 'stimulate' again pre-Election, will the market react the same way? And will the trigger for such an event be a major decline once again in asset prices?
MUST WATCH: Paul vs. Paul on Bloomberg TV
By way of post-mortem of this afternoon's epic Paul vs Paul Bloomberg TV cage-match, we reflect on the various headlines the two gentlemen made during the event and in the context of the credibility with which one of the gentlemen discusses his ability to manage the world and the 'ease' with which he and his henchmen can control inflation (and yet an unmanaged economy is subject to 'extreme volatility'), we remind readers of the post-WWII years and the extreme swings in purchasing power that their so-called managed economy created. As ever it appears the mutually-assured-destruction fall-back premise of Keynesian Krugman is trumped by the fact-based method of the more Pragmatic Paul.
- *KRUGMAN SAYS UNMANAGED ECONOMY SUBJECT TO "EXTREME VOLATILITY"
- *PAUL SAYS FED IS LENDER OF LAST RESORT FOR POLITICIANS
- *KRUGMAN SAYS U.S. ECONOMY IS "PERSISTENTLY DEPRESSED"
- *RON PAUL: FED HAS DESTROYED 98% OF DOLLAR'S VALUE SINCE 1913
Lousy Chicago PMI figures/bad Greek retail sales/Egan Jones lowers Spanish debt to BB plus from BBB-/ECB set to do margin calls on LTRO banks
The issue which has swept down the centuries and which will have to be fought sooner or later, is the people versus the banks. – Lord Acton [1834-1902]
Gold has Bottomed, Alf Fields
Elliott Wave Gold Update: In the article “What Happened to Gold” dated 1 March 2012, the “other possibilities” mentioned in the event of gold dropping below $1650 related firstly to the 61.8% retracement of the prior rise. The prior rise was from $1523 to $1792, so the 61.8% retracement was $1626. There was a further possibility of the retracement being 2/3 of the prior rise, also a Fibonacci relationship. That produced a figure of $1612. The first number $1626 did provide some support to the market but the absolute low was $1612.8 on 4 April 2012. This low came at the culmination of a double zig-zag correction, which adds to the validity of that low. The odds now suggest that the gold correction bottomed at $1612.8 on 4 April 2012 and that the gold market is in the early stages of a sharp upward move.
Apr 28, 2012
Notes From Underground: No Box Can Contain These Thoughts (Excerpts from post)
OUTSIDE THE BOX ON THE FRENCH ELECTIONS: Everyday I think about this Sunday’s French presidential elections the outcome grows in importance. WHY? If Sarkozy were to lose, in my mind it will represent a sea change in the political fabric of the European polity. Sarkozy is a disciple of Charles de Gaulle whose policies for France, both foreign and domestic, were to return France to its role as an economic power and diplomatic hegemony. However, after the Suez debacle of 1956 when Eisenhower admonished Israel, France and Britain for their international bravado in seizing the SUEZ CANAL, the British understood their role in the world had changed and it was now the U.S. shaping global policy. De Gaulle understood the game had changed also, but his stance was to keep the U.S. from being the world’s dominant power. Under de Gaulle, whatever the U.S. favored, France was against. France as a participant in NATO … ABSURD.
De Gaulle thought to tie France and Germany together in a unified Europe that could counter-balance the global power of the U.S. The French diplomatic corp with the German economic locomotive. Remember, it was de Gaulle who crowed that Europe was France and Germany. It was also de Gaulle’s economic advisor, Jacques Reuff, who helped put an end to the Bretton Woods’ world by French demands for U.S. GOLD as they sought to exchange their vast horde of GREENBACKS all in an effort to prevent the U.S. from being the global HEGEMONY.
So as the election of 2012 reaches its end, will Francois Hollande defeat Sarkozy and put an end to MERKOZY? The SOCIALIST candidate Hollande seems to be seeking to diminish the incipient strength of Germany by espousing the belief that France should align with the peripheries and others in pushing for a GROWTH PACT rather than the FISCALSADISM PROMOTED BY THE GERMAN BUNDESBANKERS.
The death of Gaullism will create a period of confusion in a Franco-German-dominated EU. A French alliance with the weaker states would be a major statement about contemporary Europe. With Putin always looking to roil the status quo and Gerhard Schroeder heading NORDSTREAM, the pipeline arm of GAZPROM, Germany’s largest energy provider, the French election looms very large indeed. Russia can become a very significant variable as an alternative to the role that France has played in Europe during the last 50 years. As the SUNDANCE KID SAID: “YOU JUST KEEP THINKING BUTCH. THAT’S WHAT YOU’RE GOOD AT.”
Jim Sinclair’s Commentary
Gold Shakes Off $1.24 Billion ‘Fat Finger’ By Tatyana Shumsky
April 30, 2012, 3:59 PM
Gold futures ended nearly unchanged Monday, after a large early-morning sell order roiled traders and slashed prices by almost $15.
The CME Group Inc.’s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m. EDT. The sale took out blocks of bids as large as 84 contracts in one fell swoop and cut prices down to $1,648.80 a troy ounce. The overall transaction was worth more than $1.24 billion.
Gold traders buzzed with speculation that the transaction was an input error — a so-called "fat finger" trade.
"Or a Gold Finger as it might be known in the bullion market," traders at Citi joked in a note to clients.
One indicator that the transaction was a mistake was its size. At 750,000 troy ounces, such large trades are rarely conducted amid very thin trading volumes. Monday trading was expected to be quiet as market participants in China and Japan are out on holiday and many European traders are preparing for a holidays there.
Jim Sinclair’s Commentary
Gold may touch $7,000 per ounce before end of uptrend
Reuters Apr 25, 2012, 03.51AM IST
NEW YORK: While gold’s latest price gyrations may seem excessive to some investors, Bank of America analyst MacNeil Curry said the volatility was nowhere near extreme enough to convince him the precious metal’s long-term uptrend was nearing the end.
In fact, at last week’s Market Technicians Association symposium he said of gold’s secular bull trend, "From an Elliott Wave perspective, we have seen a nice, solid, orderly advance."
Though gold has swung in ranges of roughly $40 per ounce in the last week, $90 per ounce over the last four weeks, and close to $400 since last September when it reached its all-time high at $1,920.30, Curry said any long-term commodity advance tends to end with, "a massive speculative blow-off."
"They don’t end quietly," the technician told conferees. He projects gold will ascend to levels somewhere between $3,000 to $5,000 and potentially $7,000 per ounce before the rally, now in its 11th year, comes to a close.
Spot gold prices jumped on Tuesday to a high at $1,648.91, after sliding almost $22 in the previous session to $1,619.99 an ounce, nearly matching the April 4 low. It stabilized at $1,640.60 per ounce in late Tuesday trade.
Jim Sinclair’s Commentary
Russia Today’s ‘Capital Account’ interviews GATA’s Bill Murphy Submitted by cpowell on 06:33PM ET Monday, April 30, 2012. Section: Daily Dispatches
9:36p ET Monday, April 30, 2012
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy was interviewed today for about 20 minutes by Lauren Lyster on the cable television network Russia Today’s "Capital Account" program. There’s a reason why the subject — gold market manipulation — can be discussed only in non-Western news media, and the continuing interest shown in it by Russia Today, a creation of the Russia government, suggests that governments not part of the market rigging have long figured it out. While Lyster’s skirt is, certainly by design, shorter than JPMorgan’s position in silver, she is once again well-versed in the subject and unafraid to press it to its uncomfortable conclusion, unlike the "money honeys" of U.S. cable TV networks. The RT interview with Murphy is posted at YouTube here:
Arch Daily notes, for decades the suburbs and the American Dream went hand-in-hand but the age-of-sprawl is ending; people are leaving the suburbs and once again flocking to cities in search of a better way of life. Whether Suburbia can be saved or not, this useful infographic looks at the key factors (from Poverty to Transportation costs to Generation Y's preferences) with a view to reinventing Suburbia as a sustainable alternative to urban life.
finally gone "he’s tired of Franco-German interference in managing the region’s debt crisis." And while the decision was known for a while, the ultimate catalyst is rather unexpected, and exposes just how frail the entire Eurozone is: “They act as if they are the only members of the group,” Juncker said today at a podium discussion in Hamburg." If this is coming from the man who admittedly lies for a living, we can't imagine just how bad the truth about the internal fissures within the Eurozone must be. Actually, we can.
Treasury Forecasts $447 Billion In Funding Needs Thru End Of September - $300 Billion Shy Of TrendlineEarlier today, the Treasury forecast that in the third and fourth fiscal quarter of 2012 (April-September), the US would need a total of $447 billion in new debt (split $182 billion in Q3 and $265 billion in Q4), bringing the total debt balance to just over $16 trillion by the end of September. While this is a commendable forecast, and one which certainly has provided to alleviate rumors that the US debt ceiling of $16.4 trillion would be breached by the mid/end of September, the chart below shows that it may be just a tad optimistic.
two weeks ago, only to be followed by Spain, it just did so again minutes ago.
discussed by Michael Norton in this TED Talk as he notes that if you think that money cannot buy happiness then you are not spending it right. His point is (and his delivery is comedic yet clarifying) that money makes you anti-social or selfish (rather than happy) as we will tend to spend that money on ourselves (or the wrong things - a new Veyron perhaps?). But via experimentation (among people from Vancouver to Uganda) he discovered that spending money in a pro-social way will make you happy... So money can buy you happiness as long as you give it away once you have it - a noteworthy caveat - especially as Norton notes that the size of spending does not matter - as long as it focused towards someone else (and not, as he notes, in a dinner for your girlfriend with hopes of benefits later). In almost every country in the world, people who give money to charity are happier than people who do not give money to charity and interestingly spending-on-other-people made teams or people (sports or sales) more successful - of course, we assume taxation does not count as spending on other people.