Friday, August 31, 2012

Gold Soars To Near Six Month High As Silver Overtakes Stocks In 2012

A very noisy gappy day with much larger volume than in recent days (which all dried up in the afternoon session until the close - for the heaviest volume day in a month) in US equities. European comments lifted us early in a correlated-risk-on manner until Bernanke's speech which hit markets like a meteor - stops were run up and down - but by the close equities and the USD ended fractionally lower from pre-Ben (notably up on the day to save the month for the Dow), Gold considerably up from pre-Ben, Treasury yields down notably from pre-Ben. Near six-month highs in Gold and five-month highs in Silver were the real movers today - with their largest gains in two months. VIX ended marginally lower at 17.5% (-0.3vols); credit was very thin today and tracked stocks in general (though less volatile); USD ended the week -0.5% which matches Oil's +0.5% on the week as Copper underperformed. Silver has overtaken Stocks as the Year-to-Date winner once again...


from Silver Doctors:
The world doesn’t yet realize it, but the forces coming down on the gold and silver markets are truly unbelievable.  These forces can’t be comprehended by any type of charting.
Presently, much of the focus in the gold and silver community is in the MANIPULATION & FINANCIAL SYSTEM.  However the physical forces coming down on the market are MUCH GREATER!!
According to the 2012 World Silver Survey, primary silver production declined compared to 2010:
Read More @ Silver Doctors

The ECB 'Compromise' Cheat-Sheet

With Bernanke leaving the door open, but not pre-committing, in a check-raise to Draghi next week, market focus remains almost exclusively on the bond-buying program to support Spain. Credit Suisse expects markets to be mildly disappointed by Draghi's words and deeds as they question how far he can go, and in terms of near-term market moves, how much is said at next week's meeting versus said at later occasions or indicated through actions (e.g. once Spain asks for help). Draghi has already started to manage expectations with his Die Zeit comments (pitched at the German populous) but in order to get a handle on what the various scenarios are - and what the implications could be - here is Credit Suisse's matrix of compromise.

How To Lose $400,000 With Credit Suisse Betting On A Big Jackson Hole Disappointment

This Tuesday, we gave the podium to Credit Suisse's rates group with "How To Make $500,000 With Credit Suisse Betting On A Big Jackson Hole Disappointment" who in turn suggested that one of the best risk return opportunities heading into J-Hole, was to go short the 10 Year betting on disappointment by Bernanke (as a reminder earlier today we showed that virtually 100% of QE was already priced in). Well, Bernanke came and went, and although our personal take on the speech was broadly negative, which highlighted the adverse side effects of what would happen if there is another big QE round, and substantially toning the exuberant language from the latest FOMC minutes, which had previously made it seem that the majority of Fed presidents thought more easing should be imminent resulting in another centrally-planned market rip, the stock market did not agree with our take. At least not initially. As for Credit Suisse, it said to "put on a $50K DV01 short at 1.64% and expect a steep selloff when the Fed disappoints, with a 1.75% target. If all works out according to plan, everyone involved should be $500,000 richer at market close on Friday with Bollingers all around." Turns out nothing worked out quite as expected. In fact, as a result of the J-Hole remarks, we have had another stock buying spree of anything that is not nailed down, with gold popping the most, the DJIA soaring as much as 150 (although rapidly taking on water), and the 10 year... well, let's just say anyone who was on the other side of the CS prop traders, sometimes called "flow" for Volcker Rule purposes, is now down -$400,000 on a trade that was supposed to be a +$500,000 meatpacking extravaganza.

Silver Breaks its Downtrend

Trader Dan at Trader Dan's Market Views - 13 minutes ago
For nearly the last year and a half, silver has been in a sustained downtrend in price although it has managed to find a floor of support near the $26 level. This week it has finally broken that downtrend. If this metal is going to begin a sustained rally, any setback in price should find buying emerge near the downsloping blue line shown on the chart. Failure to hold this level and particularly now the $30 level, will see the metal fall back into that triangle formation with support then coming in down closer to $28. Note that the metal is now trading above the 50 week moving avera... more » 

The Action In The Metals Today

Dave in Denver at The Golden Truth - 38 minutes ago
If you read between the lines of Bernanke's headline comments, he essentially is saying that he's ready to print a lot of money if "necessary." That's why the metals where ambushed hard yesterday, it's why the dollar dropped like a rock on no other news overnight, it's why they took the metals down as the headlines hit and it's why the metals spiked hard after the initial hit today. We actually removed all hedges from our fund yesterday after the ambush because I suspected this would be the case. This is highly orchestrated at this point and frighteningly Orwellian. The metals are... more »

More Pain for the Middle Class courtesy of Bernank...

Trader Dan at Trader Dan's Market Views - 2 hours ago
Check out the following chart of the Continuous Commodity Index or CCI and note that it has managed to put in a weekly close above the 38.2% Fibonacci Retracement Level of the move lower from its all time recent high made last year. If the market pysche remains the same, look for this index to now make an eventual run back towards the 597-600 level. We can look at these charts as subjects of interest to us as traders/investors but what this particular stock represents is increasing pain for consumers and the hard-pressed middle class in one of the worst, if not the worst "recovery" ... more » 

The Bernank Jawboning the Markets

Trader Dan at Trader Dan's Market Views - 3 hours ago
The long awaited speech from Fed Chairman Ben Bernanke at the Jackson Hole Summit has come and gone without any definitive action being announced. However, the Helicopter Man let it be known that he believes the first two rounds of QE were a rousing success. Once again he promised that the Fed stands ready to act if the economic conditions or data warrant it. As usual, the markets, hungry for more of the spiked punch bowl, wasted no time in casting off their initial disappointment with a huge round of indiscriminate buying directed at the risk asset categories. Gold blew through to... more » 

M&A Is Strong In Asia

Admin at Marc Faber Blog - 3 hours ago
In Asia we have a lot of takeover activity and much more will happen. - *in Bloomberg* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

You Cannot Fix Economies By Printing Money

Admin at Marc Faber Blog - 5 hours ago
I don`t believe you can fix economies by printing money. - *in Bloomberg * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

The Real Reverse Robin Hood: The Bernank And His Merry Band Of Thieves

Listen up, debt-serfs, you have it good here on the manor estate. You get three squares of greasy fast-food or heavily processed faux-food a day, and if Reverse Robin Hood and his Merry Band of Thieves is ripping you off it's for a good reason: the predatory Neofeudalist Financial Lords need the money more than you do, as they have a lot of political bribes to pay: it's an election year, and the bribes are getting increasingly costly. Poor things, we're sure you understand. Now go back to work or watching entertainment (or "news," heh) and leave the Lords alone - but answer these 11 questions first, before hailing the new hero.

Friday Humor: Gold Is A Barbeque Relish

"My Doctor’s an idiot.  A few years ago, he started expressing concerns about my weight, pointing at this chart supposedly showing how much a man of my height should weigh.  One glance at his stupid chart and it was clear to me that he had completely misdiagnosed my condition.   There was nothing wrong with my weight, I just wasn’t tall enough.  Clearly I needed to grow my way out of this. So I went home and googled “how to stimulate growth.”  Once I got past the all the baldness cures and penis pumps (it’s not my bag, baby), I found hundreds of papers so incredibly boring I knew they had to be true.  In no time, I was able to design and implement my own stimulus plan based on the irrefutable scientificky principles of Nobel prize winners and other people so smart they never had to do an honest day’s work in their lives.  Despite the difficulty climbing stairs, I was feeling pretty good about things until my last check-up..."

On The Difference Between Bonds, Equities, And Gold; "No-QE-Without-A-Crash" Or "Flow Vs. Stock"

Is the reality of different time-horizons and event discounting really starting to tell on markets? Equities have now sagged back lower while Treasury yields are accelerating lower and Gold higher. It seems that stocks fully comprehend that QE does not come without more pain in the short-term and are starting to price for that - while given the low/no cost of carry for Treasuries and Gold, the eventual reality of further financial repression and money-printing can be discounted in from longer maturities. It seems somewhat in-the-stars that the Fed will do more as they have convinced themselves that all is well with their extreme policies and short-term benefits outweigh ultimate costs, but this afternoon's disconnect between the QE-to-the-moon feeling in Gold and Treasuries and the QE-not-so-soon feeling in Stocks may well be a trend to watch as the only sure thing is when not if The Fed acts.

Mission Intractable: ECB Bond-Buying Plan-For-A-Plan Will Self-Destruct In 24 Hours

Have no fear; Europe closed and equities leaked so a quick series of European comments are more than required... Bankia, check! Bank backstops, check! ECB Bond-Buying Plan...

So no real idea what they are actually going to do. However!


Bankia Gets 'Pre-Bailout' Bailout "Immediately" As Bad Loans Jump 44%

  With Spain's new-found belief in its own incompetence omnipotence, they are now throwing bad money after bad in advance of the European bailout by pre-bailing out (bridge recap?) Bankia via the FROB (and it seems like they are in a hurry):
which makes sense given that:
  • *BANKIA GROUP BAD LOANS RATIO 11% IN JUNE VS 7.63% IN DEC. (a 44% rise!!)
The bottomless pit will all be 'fixed' though by October (just like Dexia was?)

Former Fed Governor Heller: "Fed Will Not Act Before Fiscal Cliff Resolved"

Perhaps it is the weight that is lifted from having to tow the propaganda life while under the influence of the Fed, but Robert Heller (ex Fed Governor) just laid out the 'translated' version of Bernanke's speech this morning. "I don't think the Federal Reserve will take any action, certainly not until the fiscal cliff, the fiscal uncertainties are actually addressed," which is similar to our interpretation of Bernanke's comments as he added "if they're not addressed and the economy falls off the cliff; yes, then you may get QE3," but "I don't see that happening before the election!" This great interview - somewhat stunningly truthy for CNBC - is well worth five minutes of your time (on this ever-so-hectic Friday before Labor Day) as Heller discusses teh fading impact of QE, the risk of enormous losses for the Fed, and the danger of believing in a 'safe' exit strategy.

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European Stocks Explode Higher As Spanish Bonds Implode

Sigh. Spain's IBEX gained over 3%; Italy's MIB gained over 2%; and all but the UK's FTSE equity index ended very nicely green today (all jerked higher by Spain's comments on their bad-bank and then Bernanke's cover). However, European Government Bonds (EGBs) failed dismally. Spain's 10Y spread to bunds ended the week 46bps wider and Italy 15bps wider and while some point to the short-end as evidence that all is well, Spain saw modest weakness in the 2Y today post Bernanke (though Italy rallied). The curve steepening was dramatic to say the least as the market appearsd to be increasingly assuming the ECB will monetize short-dated govvies - our own view - consider what the implied forward financing costs are given these steep curves as clearly noone trusts this as a solution and will merely subordinate the entire market.  Spain 2s10s curve is now at its steepest on record at 328bps! and this is not helping:
But buy stocks...

Algos Set New Speed Reading Record: 4549 Words In 20 Milliseconds

The market is indeed a discounting mechanism it appears. In a mere 20 milliseconds, the world's 'traders' had managed to read Bernanke's 4549-word script, interpret it (as bearish in this case - which apparently is wrong now?) and start to sell down the major equity indices. As Nanex points out, not only was the reaction lightning fast (actually faster than lightning) but it occurred in their newly created 'fantaseconds' as trades were timestamped 'before' the bids and offers were even seen in the data-feed. How long until the machines can interpret Bernanke's 'pre-QErimes' and really front-run reality?

When One Hilsenrath Is Just Not Enough, Here's Another: "Bernanke Signals Readiness To Do More"

In the immortal words of the Jackson 5: "I'll Be There" seems to be the meme du jour - which appears to us to be the same message that Bernanke (and his proxy Hilsenrath) have been on for a few years now. However, in case you hadn't had enough sycophantic central-bank-fellating 'hope', the WSJ's front-man just reiterated for one and all that Ben's our man. In our subtle opinion, it seems however that perhaps Bernanke was a little disingenuous with his talk of 'policy tool effectiveness' - as clearly his efforts have not had the desired economic effect so far (or he would not need to reiterate the ability to do more of the same).

Fascist, Criminal TSA Agents Attempt to Grope Dr. Ron Paul, Family & Staff

On Switzerland and the mafia

by Simon Black, Sovereign Man :

A few weeks ago, western governments’ war on productive people took an interesting twist when US immigration authorities detained two teenage children of an asset manager based here in Switzerland.
The kids were traveling through the United States by themselves to visit extended family, and they were interrogated for six hours about their father’s business and whereabouts.
During the six-hour ordeal, the children were not allowed to contact family members who were waiting for them, nor any sort of attorney or advisor. You can just imagine grandma and grandpa waiting in the arrivals hall for six hours, petrified that something terrible had
happened to the children.
Read More @

Bernanke, Europe, China & The Surge In Gold & Silver

from KingWorldNews:

Today acclaimed money manager Stephen Leeb told King World News that he expects the Fed will in fact ease at their September meeting. Leeb also discussed the strong move in gold and silver, but first, here is what Leeb had to say regarding Bernanke and the Fed: “I think what investors clearly wanted to hear from Bernanke is that he’s ready to ease on monetary policy, and that he’s ready to open the floodgates again. That, combined with a much more docile Merkel, and news today that China’s copper demand might be a lot stronger than people think, and you really had a trifecta here today.
The Bernanke story is right in front of us. What he said, and he made this crystal clear, is the economy is very disappointing to him. He also used a very strong adjective to describe unemployment, and he stated he’s going to do whatever he can about it. The language he used, the adjectives he used, suggested he’s ready to do something, Eric.
Leeb continues @

ECB Becoming Twin of Fed

by Frank Suess, The Daily Bell:

“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” ~ Daniel Webster, speech in the American Senate, 1833
Increasingly, Mario Draghi, the European Central Bank President, is showing his true colors. He is clearly on the road to becoming Europe´s clone of Ben Bernanke. That said, Draghi is pushing hard against Germany´s (Merkel´s) resistance of running full-speed down the Keynesian road of monetary inflation.
In this context, our regular Mountain Vision contributor, Fredrik Boe-Hanssen, as you’ll see following my introduction today, has written another insightful article on Europe’s fiscal and monetary conundrum: “How The ECB Became Intertwined in Politics and Fiscal Bailout Facilities.”
Read More @

Gold surges to five-month high on Fed QE3 Hints

by Frank Tang, Reuters:
Gold surged to a five-month high in heavy trade on Friday after Federal Reserve Chairman Ben Bernanke’s key speech fuelled speculation of new U.S. stimulus in the near future.
At the economic symposium in Jackson Hole, Wyoming, Bernanke said that progress reducing unemployment was too slow and the U.S. economy faced “daunting” challenges but he stopped short of providing a clear signal of further monetary policy easing.
The metal fell immediately following the release of Bernanke’s speech as markets were disappointed that the Fed chief did not send a strong message about a new round of bond-buyback known as quantitative easing (QE). However, bullion quickly rebounded $35 per ounce, or 1.5 percent, from the low as markets later interpreted his comments as stimulus friendly.
Read More @ Reuters

Ron Paul To Have Special Announcement On The Jay Leno Show – 3rd Party Run?

from matlarson10:

The Bernank Fails To Move Gold [& Silver] Market Lower

by Jeff Nielson, Silver Gold Bull:
Following the solid gains in the price of gold last week and the much more explosive rise in the price of silver, all expectations (even among normally bearish commentators) were that bullion prices would continue rising this week. That all changed Monday morning, however.
At that point the Corporate Media released their Script for this week (written by the banking cabal itself). They “predicted” that B.S. Bernanke would “disappoint the market” when his prepared remarks would be released to the world on August 31st.
Experienced commentators and investors alike immediately understood the game being played, since it’s been played on countless occasions in the past.
Read More @

We’ll all shiver if Germany can’t shake economic cold

by David McWilliams, David McWilliams:
IF you want to know where the classic 1980s power ballads (the theme from ‘Dirty Dancing’, Laura Branigan’s ‘Self Control’, Heaven 17 numbers and assorted gems from the New Romantic era) ended up, look no further than German radio. While I was driving through the northern bit of the Rhine yesterday, the car radio offered up an eclectic mix, ranging from the reasonably nostalgic to the God-awful, in a display of Catholic music tastes befitting a journey that concluded just outside Cologne cathedral, Europe’s biggest.
The other noticeable thing about driving in Germany on a weekday is the sheer amount of commerce on the roads. The inside lane of the autobahn is an uninterrupted convoy of trucks shipping Germany’s exports all over the continent.
Read More @

1976 Redux?

by Christopher Manion, Lew Rockwell:
The Mitt Romney nomination reminds me of the 1976 convention that nominated Gerald Ford. Back then, Ford’s fixers (Dick Cheney and James Baker III) did everything they could to eviscerate Governor Reagan’s supporters at the 1976 RNC – and then tried to “reunite” the GOP and try to recoup the Reagan supporters they had alienated, all to no avail.
It failed because it was sheer pretense, disingenuous on its face. Baker and his sidekick, David Gergen, hated conservatives as much as Ford hated Reagan. They hated especially the millions of “blue collar” Democrats who came to provide the backbone of the “social conservatives” that supplied Reagan’s winning margins in 1980 and 1984.
Ford was adamant and unrepentant about his loyalty to the Rockefeller-Bush establishment. He bragged in the 1990s that his proudest accomplishment was the appointment of Supreme Court Justice Stevens, who quickly became a left-wing stalwart on the court, to be joined there by George H.W. Bush appointee David Souter in 1990. Time after time, the GOP Hot-Tubbers have lied to traditional conservatives, gotten their votes, and then betrayed them.
Read More @

Schiff – The US Will Be On A Gold Standard In 12 To 24 Months

from KingWorldNews:
Today Peter Schiff stunned King World News when he said the US will be back on a gold standard “… in a year or two.” Schiff also said, “I would have expected a (financial) collapse to have already happened.” Schiff went on to warn, “… at this point I’m going to assume there is no more stay of execution and we are going to have our crisis coming up right after Europe.”
But first, Schiff had this to say regarding Bernanke and his Jackson Hole speech: “QE3 is coming. He’s got that card up his sleeve. It’s been hidden up there for a long time. He’s reluctant to admit it, but he will play it eventually. He’s going to be coy about it because he doesn’t want to actually come out and reveal his hand.”
“You know we’ve got a phony recovery, so it’s going to fail. So we are going to get more QE. It’s not that we need it, but if we don’t have QE3, then we are back in recession. The Fed is going to try to stop that, even though the recession is part of the cure.
Peter Schiff continues @

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The Bernank Fails To Deliver As Chairman Checks To Congress

Bernanke takes the wind out of the market's euphoric sails: "Substantial further expansions of the balance sheet could reduce public confidence in the Fed's ability to exit smoothly from its accommodative policies at the appropriate time. Even if unjustified, such a reduction in confidence might increase the risk of a costly unanchoring of inflation expectations, leading in turn to financial and economic instability."

The Schizophrenic Market Update - Buy The Rumor, Then BTFD

It's been 20 minutes and in that time we have been entirely depressed as every risk-on asset dumped to the day's lows or lower and now we are entirely euphoric - there is still hope - as Gold/Silver make new highs, stocks recover all their losses, Treasury yields contonue to fall, and the USD plunges...

Ahead Of The Bernank's Big Speech - Market Is In QE-On Mode (Apart from FacePlant)

After this morning's low volume stop-run to the highs (divergent from Spain's 10Y fulcrum security), we have gone nowhere during the day-session so far - even with a small miss on Chicago PMI and beat in Confidence. But with a few minutes to go until his big moment, markets are trading in a QE-ON mode in anticipation of Ben's big words (except FB -4%). Treasury yields down, USD down, Stocks Up, Gold Up, Oil Up. Primed for disappointment...

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Follow the Retail Stocks

Eric De Groot at Eric De Groot - 2 hours ago
Why not? This party bus won't stop rolling until the wheels fall off unexpectedly. That won't happen until time and negative divergences in key markets suggest the lug nuts have loosened. Retail Sales to S&P 500 Ratio: Headline: Retailers fare well in August, sales beat estimates (Reuters) - Nearly all U.S. retailers posted... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Singapore Has The Best Education In The World

Admin at Jim Rogers Blog - 3 hours ago
Singapore has the best education in the world, the best healthcare, the best everything. I think that the best gift that I can give two children born in 2003 and 2008 is to know Asia and to speak Mandarin. - *in MSN Malaysia * * *Related: iShares MSCI Singapore Index Fund (ETF) (NYSE:EWS) *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.*

The $3,200,000,000,000 Question: Why Housing Has Much More To Drop Before It Bottoms

It is no secret that having failed repeatedly at the trickle down aspect of QE1, QE2, Op Twist 1, Op Twist 2 (and implicitly LTRO 1 and LTRO 2) as it pertains to the man in the street (if not the man in Wall Street, who was subject to 1-2 years of subpar bonuses which have since regained their upward trendline), the last effort the central planners of the world, and the administration, have is to furiously do everything in their power to reflate housing one more time, following what is already a triple dip in home prices ever since the December 2007 start of the Second Great Depression. Which is why month after month we get seasonally fudged, conflicted and outright manipulated data from various sources how housing has bottomed, for real this time, and things are finally looking up. Remember: with any con game, the key word is confidence, and the US consumers need to regain their confidence. Sadly, as the following very simple chart and accompanying explanation, the answer to the housing question is only one: there will be no housing recovery until much more debt is eliminated. $3.2 trillion to be precise. Everything else is merely fits and spurts of upward action predicated by easy money hitting the market either directly, or via the "REO-to-Rental" stimulus program du jour, which lasts for a few months then promptly evaporates.

Morgan Stanley Prepares To Be Tri-sappointed; Sees No Policy Boost From US, Europe, Or China

Despite high-flying equity indices, there is some underlying concern that all is not rosy in the global economy (and that Fed/ECB/PBoC might not save the day this time). As Morgan Stanley notes, the overcrowded trades are overweight US and within US overweight defensives - implying cyclicals are starting to reflect the current global macro weakness and that there are further downgrades to global growth forecasts to come. Expectations for a repeat of H2 2011's surge in positive surprises are misplaced as several unique factors were at play last year - and are very much lacking this year; moreover global growth indicators are significantly weaker than a year ago. With this background, MS also does not expect imminent QE in the US; the Chinese policy response continues to lag expectations; and there are several hurdles to executing ECB action - all of which leave them expecting further substantial downgrades to 2013 consensus earning forecasts in the US.

Relying Upon The European Numbers

We fear that the data given to us by Europe is erroneous. The resident institutions in the world where one thinks that accurate data may be found for Europe are Eurostat and the Bank for International Settlements. Spain and her official admission of "dynamic provisioning" has raised all kinds of questions in our mind and has unsettled our belief in the data provided by Europe. It is now quite apparent that the numbers for all of the Spanish banks, are inaccurate. It may well be that the EU or the ECB could bury what may be found but it would be awfully tough for the IMF to hide any material breaches. Even when considering the IMF however, certain questions are raised. Their projections for Europe and each and every country in Europe have been wrong, dead wrong and far too optimistic. This then would explain why Europe is in such trouble because if the data is not truthful then the truth, as most often happens, leaks out from underneath that which is hidden and provides the outcomes that the Europeans have tried so hard to avoid. Whatever the real numbers are, they are providing the consequences that result from their actuality.

On Bernanke's Legacy In His Own Words

Overnight the WSJ's Jon Hilsenrath did his best to entirely redirect the discussion of Bernanke's legacy by setting up so many strawmen even TS Eliot would be totally lost. Instead of focusing on the person who was, together with his predecessor, was directly responsible for a crisis, which over the course of 30 years of "great moderation" pulled over $30 trillion in future demand to the present (benefiting almost exclusively the banker class), and which will guarantee pain and suffering for generations of Joe Sixpacks, he portrayed Bernanke in the light of St. Ben, or the person who may or may not have done enough to save Capitalism. We fail to fall for the bait. We hope nobody else will either. Which is why we present the following compilation of documented Chairsatan greatest hits from the public record. It speaks more than any planted article ever could.

Ron Paul Recants The GOP, Just Says No To Keynesians

As we anticipate more demand-rigging, pump-priming, can-kicking experiments from Bernanke today, Ron Paul just came out with his latest stream of truthiness (via Bloomberg):
Indeed, what is the opposite of 'between a rock and a hard place' when deciding on just who will provide 'change' in November.

Hilsenrath Sets Off To Preserve Bernanke's "Legacy"

Yesterday, when the market was plunging (by less than a whopping 1%, yet magically defending the 13K "retirement off" threshold in the DJIA), we wondered: where is the Fed's favorite messageboard: WSJ "journalist" Jon Hilsenrath. We found out at 3 am, when instead of releasing another soon to be refuted rumor of more easing, we discovered that the scribe was busy doing something very different: discussing the pros and cons of the Chairsatan's legacy.

Frontrunning: August 31

  • Romney Promises to 'Restore' U.S. (WSJ)
  • Dirty Harry Makes Surprise Appearance (WSJ)
  • It has always been about the gold: Time for eurozone to reach for the gold reserves? (FT)
  • EU Plan Said to Give ECB Sole Power to Grant Bank Licenses (Bloomberg)
  • More attempts to marginalize Germanty: Brussels pushes for wide ECB powers  (FT)
  • Justice may be blind but it has geographic limits: Apple Loses Patent Lawsuit Against Samsung in Japan (BBG)
  • ECB Said to Use Greek Myth for Security on New Euro Banknotes (Bloomberg)
  • Alberta deficit set to triple on slumping oil prices (Globe and Mail)
  • Reid's ties to China-Nevada solar plan draw ire (Reuters)
  • Bernanke may hint at QE without boxing Fed in (Reuters)
  • Berezovsky loses against Abramovich  (FT)
  • Spain Considers Bankia Re-Capitalization Without EU Money (Bloomberg)

Overnight Recap And Today's Key Events

Following a series of bad economic news (Eurozone unemployment, rising inflation, plunging retail sales in Germany, Spain and Greece) out of Europe, and the usual sound and fury out of the ECB signifying nothing (was there finally news that Weidmann and/or the Buba are endorsing anything Draghi is doing - instead of seeking to potentially quit his post leaving the ECB in limbo? No? Then stop flashing red headlines which are completely irrelevant), the EURUSD has decided to go on its usual countersensical stop hunt higher in hopes an algo or two will push it even higher on nothing but momentum, with has one purpose only: to allow the pair enough of a buffer so that when it does fall after the J-Hole disappointment, it has more room to drop. And as European newsflow fades into the periphery, everyone is once again focusing on Wyoming where Bernanke is now broadly expected to do absolutely nothing. What else are market participants focusing on? Here is the full ist courtesy of Bloomberg daybook.

Stagflation: Eurozone Unemployment Hits Record High As Inflation Rises Above Expectations

In July European unemployment rose to 11.3% - a record post-Euro rate, and the highest since 1990 for the constituent countries. While this was in line with estimates, what surprised the market, and has sent the EUR paradoxically higher (paradoxically, because all a continent in stagflation, which Europe by now most certainly is, is to have its currency rise just when it needs to export more goods, in the process entrentching its economic plight even further) is that inflation in August picked up from 2.4% to 2.6%, beating expectations of a 2.5% increase, allowing the European misery index to stand head and shoulders above the rest of the world.

Today’s Items:

Will China Lend Battered Euro Zone a Helping Hand?
Here we go again folks.   Could Merkels request compel China to come to the EU’s rescue?   Give me a break.   China is not interested in throwing their money down a fiscal black hole.   They want tangibles and they want items for the future and paper promises just do not cut it.

Gold To Hit $3,000 On Supply Concerns
Sean Boyd, CEO of Agnico Eagle, believes that gold could reach $3000 based on lack of supply.   There is increased demand for physical gold by both as investments and by Central Banks.   This is because, when looking at the late 70′s, gold had the highest returns against other asset classes like T Bills, Bonds, Stocks, and real estate.   Another force for gold is China is about to stimulate their economy, with about $1 trillion in money printing, for projects to boost the economy.

Lindsey Williams
Okay everyone, grab your pencil and paper because here is what Lindsey Williams has to say…
1. People around the world do not trust their governments and that is a part the elite’s plan using chaos.
2. The elite are having a problem with Syria…   They did not expect Assad to last this long.
3. The elite are having problems and are very upset with Obama for different reasons than the average American.
4. War is the instrument used most by the elite to get what they want.
5. Something drastic is about to happen to the dollar and there could be an imminent shutdown of the U.S. Government.
6. The Fed is scared to implement QE3 because the BRICS have threatened to drop the dollar period.
7. Do not sell your gold and silver and it is the only way to protect your financial assets.

The Silver Lining
Yes, we will have an economic collapse; however, here are a few reasons to be optimistic about the future.
1. 95% of America’s land space is rural, “wide open” space and even drones would be limited.
2. Government forces are limited and can only cover high-density population areas — the cities.
3. Rural culture teaches a survival mindset.   Farmers are very resourceful and innovative.
4. FEMA round-up attempts will not work very well with prepared “country folks”.
5. Those who survive will respect liberty, justice, personal responsibility and the order of law.

Alaska Gets It
Because of its remote location and dependence on a flow of supplies from the lower 48 states, Governor Sean Parnell is making disaster readiness a hallmark of his administration. His solution is simple…   Build giant warehouses full of emergency food, with a 5 year shelf life, and supplies, just in case.   With Anchorage alone, having about 300,000 people, he is going to need some big warehouses folks; however, he should be applauded for his efforts.

Ron Paul’s Maine delegates, some of whom were war veterans, were barred from the Republican coronation err… convention.   The Republican National Leadership acknowledged that there the Maine voting was filled with irregularities; however, their solution was to replace some of Ron Paul’s delegates with ole “Goldman Sachs” Romney cronies.

Finally, please prepare now for the escalating economic and social unrest.   Good Day!

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Greyerz: Investors Assets To Be Stolen In The Coming Collapse

from KingWorldNews:
Today Egon von Greyerz told King World News, “I’m seeing how massive amounts of money are within the system, and people think they are safe, but they are not.” Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also warned, “This is the illusion that people are living under, and it’s very sad. That’s not going to be the case. The banks are going to close if there is a problem, and people are not going to get access to their assets.”
Here is what Greyerz had to say: “Right now the markets are in a waiting game. They are waiting for Bernanke’s Jackson Hole speech tomorrow. They are (also) waiting for the German court decision which is on the 12th of September. This is to decide if they are going to approve the ESM (European Stability Mechanism), which replaces the EFSF.”
“Now, the EFSF is running out of money, they’ve only got about $200 billion left. Spain and Italy, only, will need about $700 billion. We know for a fact that the eurozone and Southern countries are in desperate need of additional funds.
Egon von Greyerz continues @

What To Expect From The Bernank At J-Hole

Expectations for tomorrow's J-Hole speech by the venerable Ben Bernanke vary from the mundane "things-we-can-still-do; monitoring-situation" to the exuberant "we'll-print-our-way-out-of-this-mess-no-matter-what-and-I've-got-your-back-for-anything-more-than-a-1%-drop-in-the-Russell". We suspect, like Morgan Stanley's Vince Reinhart that a lot of people are going to be grossly disappointed  as the FOMC (C for Committee) meeting is so close and the election being just around the corner means playing-down any miracle-making. Instead we suspect it will be more of the same - disappointment in economic performance, could do better, closely monitoring, Fed-has-tools; i.e. a replay of most of his recent speeches in tone. Reinhart does see some room for surprise though - especially on conditional policy rules (and the potential problems with over-reaching their mandate).

Paul Krugman’s Mis-Characterization Of The Gold Standard

With a price hovering around $1,600 an ounce and the prospect of "additional monetary accommodation" hinted to in the latest meeting of the FOMC, gold is once again becoming a hot topic of discussion. Krugman, praising 'The Atlantic's recent blustering anti-Gold-standard riff, points to gold's volatility, its relationship with interest rates (and general levels of asset prices - which we discussed here), and the number of 'financial panics' that occurred during gold-standards. These criticisms, while containing empirical data, are grossly deceptive.  The information provided doesn’t support Krugman’s assertions whatsoever.  Instead of utilizing sound economic theory as an interpreter of the data, Krugman and his Keynesian colleagues use it to prove their claims.  Their methodological positivism has lead them to fallacious conclusions which just so happen to support their favored policies of state domination over money.  The reality is that not only has gold held its value over time, those panics which Krugman refers to occurred because of government intervention; not the gold standard. Keynes himself was contemptuous of the middle class throughout his professional career.  This is perhaps why he held such disdain for gold.

comex data only

Good evening Ladies and Gentlemen: I am back and the surgery went real well.  I am very wobbly but I will attempt to give you the data.  The physical stories etc were written today prior to my surgery. I will catch up on all of the major stories on Saturday with you. The total comex gold OI fell by 3808 contracts from 426,559 to 422,751 as the bankers raid was quite effective in reducing OI as

The Mogambo Speaketh!

Richard Daughty, a.k.a., 'The Mogambo Guru' at Mogambo Guru Report! - 9 hours ago
August 30, 2012 Mogambo Guru I noticed that I don't laugh as much as I used to, but I curse a lot more. I figure it's because things economic are so serious and insistently suicidal lately. I still laugh at funny jokes, however, like the classic "Knock knock. Who's there? Mogambo Guru. Mogambo Guru who? That's what everybody says!" Hahahaha! Well, I am embarrassed to see that you are not laughing at what, I admit, is kind of an "inside joke", referring, as it does, to the fact that I am so unknown, despite having delivered the best investment advice (which is to buy... more » 

Volatility on the Rise

Trader Dan at Trader Dan's Market Views - 9 hours ago
It is interesting to note the price action of the CBOE Volatility Index or VIX of late. The S&P 500 appears to be struggling to break through the 1420 - 1425 region. That combined with growing concern that tomorrow's Bernanke comments are not going to be sufficiently "QE bullish" is fueling nervousness among traders who are fearful of being caught in any downdraft resulting from disappointment among the "punch bowl" crowd. This same concern is also providing selling pressure in the metals with gold bears capping at the $1680 level while nervous longs exit the market. Dip buying howe... more » 

Charting The Unprecedented 'HFT-Driven' Rise In Intraday-Trading Volatility

Sometimes a picture can paint a thousand words; in the case of these two charts from Nanex, it paints more as it is abundantly clear that since Reg NMS, the 'noise' in our daily trading markets has risen exponentially as the apparent price we pay for the 'liquidity-providing' machines is up to 15-times more normalized 'price-changes' - or put another 'smoothed' way: averaged over a 20-day period, intraday volatility has doubled since HFT began (and was six times larger during the flash crash). How's your mean-variance efficient-frontier look now? Or your delta/gamma hedging program?

The Election: It's The Food-Stamps, Stupid!

In November 2008, President Barack Obama won the popular election for President by 9.5 million votes.  A burgeoning financial crisis and weakening economy helped his candidacy at the time, but four years on the sluggish pace of economic recovery is a headwind to his re-election.  Consider, for example, that there are currently 12.8 million people unemployed in the U.S., or that an estimated 8 million adults entered the SNAP (Food Stamp) program since November 2008 (total increase in enrollment: 15.6 million).  Presidential elections are won in the Electoral College, of course, so in today’s note ConvergEx's Nick Colas parses out this employment/food security economic stress for the key “Battleground” states.
Seven of the 8 swing states this election year are more economically stressed than the national average in terms of unemployment and/or food stamps, while 2 of the 3 states “leaning” toward Obama are worse off than the national average.  Romney, behind in the electoral vote count by most analysts’ figures, theoretically stands to gain from a weak national economy, but he’ll have to earn the vote of an estimated 4 million Americans in 14 key battleground states to have a shot at the White House.

As Bank Profits Plunged In 2011, Banker Bonuses... Rose

It will come as no surprise to many but everyone's favorite enemy #1, the US banker, decided to give himself a well-earned pay-rise in 2011 - according to data from Moody's Analytics (via Crain's). What is perhaps a little more surprising is the sheer gall of it given that the financial industry profits plunged over 70% from $27.6bn in 2010 to a mere $7.7bn in 2011. While the rise in salaries is not large, and the average man on the street actually saw a bigger rise, the critical point is that for two years in a row - from 2009 to 2010, and now from 2010 to 2011 - banking industry profits have dropped like a stone but the average salary of those oh-so-deserving 'Wall-Street'ers has risen.

Ballistic Precious Metals: A Basic Guide to Ammo as an Alternative “Investment”

This piece has been contributed exclusively for reader’s of SGTreport by our friend Mark (pseudonym below), a firearms industry executive & part-time police officer.
by Mark S. Mann,
If you are a serious firearms enthusiast or what some people now refer to as a “Prepper”, having a supply of ammunition is an absolute must. Regardless of what the main stream media says, it is not “abnormal” or “sinister” for people to store thousands of rounds of ammunition. For whatever reason you choose to stockpile ammo, the reality is that it’s a wise choice to do so. Let’s take a look at some interesting facts about ammunition, and the bull run of “Ballistic Precious Metals” over the last 20 years. Read More…

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The Decisive Key Now To Gold, Silver & Global Stock Markets

from KingWorldNews:
Today Tom Fitzpatrick spoke with King World News about the “decisive” areas to watch for on both gold and silver. A break of these key areas will ignite gold and silver to the upside. Fitzpatrick also issued major warnings regarding the global stock markets and China.
Here is what top Citi analyst Fitzpatrick had to say, along with some powerful charts: “I think you have to be fairly careful in these markets to get a breakout that looks fairly conclusive. If you look at silver, what we do have, which is probably the best level to look at, we have a downward sloping trendline on the log chart (see below).
We look at these types of charts when we see large percentage changes, which occurred when silver dropped from $50 to $26. Converging into the same area as the sloping downtrend line is the 55 week moving average, which is currently around $31.70.
If we get a weekly close above $31.70, that should open up for this retest of what we believe is the big level, the $37.48 level, which is the neckline of the double-bottom. So we would look at a close above this $31.70 area in silver as being decisive.”
Tom Fitzpatrick continues @


Three Questions for Mario “bumblebee” Draghi

from gpc1981, Gains Pains & Capital:

Mr Draghi… a few questions for you…
You say that whatever measure you take… it will be “enough” to support the Euro. Seeing as you’ve already spent over €1 trillion via your LTRO 1 and LTRO 2 schemes only to find that:
1) The uptick in EU banks shares lasted less with each new scheme
2) The bond and credit markets punished those banks who sought funding via these vehicles
…my question is… what exactly is “enough”? Obviously €1 trillion wasn’t. Would €2 trillion be? What about €5 trillion? Seeing as banking deposits at the troubled PIIGS banks exceed €5 trillion alone, it seems even €5 trillion wouldn’t be enough to backstop the EU and get it out of this mess. So could you quantify “enough” please?
Read More @

Did RNC “Scripted” Rules Change Start A Civil War In The Republican Party?

Make no mistake, what happened in Tampa will not stay in Tampa.
from BenSwannRealityCheck:

Ben Swann Reality Check takes a look at how the most controversial rule change in party history was not legitimately passed.

Ron Paul delegates furious over RNC

from RTAmerica:

The RNC Proves One Thing: It’s IMPOSSIBLE to take over or reform the GOP

by Joel Skousen, Lew Rockwell:
Even though it might have been a symbolic gesture, the delegates behind Ron Paul were intending to at least get Rep. Paul nominated at the convention. It would give a great boost to the grand liberty movement Dr. Paul has built for the last 20 years and the rebellion against establishment control of the GOP. They only needed delegate majorities from 5 states to nominate the good doctor and to keep Romney from going uncontested before the convention. But alas, the illegal maneuvers of the RNC have robbed the movement of their last show before the cameras, and contrary to assurances by an “insider” within the RNC, Ron Paul will get no speaking slot.
James Hohmann of has a summary of the GOP movement to stop Paul. “The Republican establishment has quelled the Ron Paul Revolution, at least for 2012. Using… procedural hardball, Mitt Romney’s campaign and his allies who control the Republican National Committee [actually, Romney controls no one at the RNC. It is run by a cadre of hardcore globlists. They are only allied with Romney because he got to the nomination despite their attempts to derail him. Their control over his advisors is total and complete] have ensured that the Texas congressman will neither speak nor be formally nominated at next week’s convention.
Read More @

Doug Wead: There is No More Left & Right, There’s The Oligarchy and Us – Meanwhile the GOP Is Destroying Itself

from WeAreChange:

Ron Paul’s Senior 2012 Campaign Adviser Doug Wead gives WeAreChange an exclusive interview about the Ron Paul RNC delegate controversy, criticism of Jesse Benton, and the real reason Ron Paul didn’t attack Mitt Romney during the campaign.

The **CRIMINAL** GOP Caught Stealing & Cheating Ron Paul At The RNC [We Live in an Absoultely Pathetic Banana Republic!]

from matlarson10:

Obama Mimics Bill Ayers Radical Ideology with New Re-Education Camps

from TheAlexJonesChannel :

Larry Grathwohl, the former FBI informant in the Weather Underground who revealed the terrorist group’s plan for re-education camps and the liquidation of millions of Americans.

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