Art Cashin On The New Normal's New Populism: 165 Million As State Dependents?

Some must read observations on the dangerous path down which American society is headed.

Fed's Lockhart Kills Hopes Of Further QEasing

As the S&P 500 makes new multi-year highs, the USD dumps, commodities surge, and AAPL just does what it does best; The Fed's Dennis Lockhart has just 'subtly' announced the walking-back of expectations of QE3 happening anytime soon, via Bloomberg:

• *LOCKHART SAYS `MONETARY POLICY IS NOT A PANACEA'
• *LOCKHART SAYS ECONOMIC DATA HAVE BEEN `FIRM' IN LAST MONTH
• *LOCKHART SAYS HOUSING IS STABILIZING AND `ENCOURAGING'
• *LOCKHART: MONTHLY UNEMPLOYMENT RISE SHOULDN'T BE EXAGGERATED
• *LOCKHART SEES `MORE APPETITE FOR RISK'

and critically:

• *LOCKHART SAYS DISINFLATION, DEFLATION NOT NOW A CONCERN

On Central Planning And "People Are Not Chess Pieces"

This simple 70-second clip summarizes perfectly the folly of the central planner - who faced with a clean slate and the ability to craft an entire society with his all-knowing hands forgets that one critical aspect of humans - free-will. No matter how financially repressed, no matter how herded into AAPL, no matter how jawboned-to-death we become; there is always the option - the optimal decision in any unwinnable game - of not playing.

Bob Janjuah Goes "Risk Off Effective Immediately" In Advance Of "Major Risk Off Phase"

A month ago, RBS' Nomura's permarealist Bob Janjuah wrnd tht mrtks r set 4 a squeeze breakout. He was right. Today, he has sent out an update, saying the party is over, the ramp is finished, and the time to sohrt ahead of a "major risk off phase" is here: "my stop loss on the risk off call effective immediately is a consecutive weekly close on the S&P500 at or above 1450. As the Global Macro Strategy team is looking for Mr Bernanke to disappoint markets at Jackson Hole next week, and also because we are confident that markets will soon discover that neither the ECB nor Eurozone politicians will actually be able to deliver on their ‘promises’, we are hopeful that our stop losses will not be triggered. For now we are happy to risk 30 S&P points against us, in order to potentially pick up 300 S&P points in our favour."

Israel Accuses Egypt Of Violating Peace Treary With Sinai Incursion

Whether its 'Trade' Wars or 'Real' Wars, tensions appear to be escalating at an increasing clip around the world. The AP is reporting that Israeli officials say Egypt is violating their 1979 peace treaty by deploying tanks in the demilitarized Sinai desert, which borders Israel.

The World's Biggest Hedge Fund Hotel Just Became The Biggest Ever - 230 Hedge Funds Own Apple As Of June 30

Three months ago when we looked at the latest quarterly hedge fund position tracker from GS, we were not surprised to learn that a record 226 hedge funds were long AAPL stock. And as the chart below proves, a major driver of the increasing price of Apple stock is that increasingly more hedge funds continue to simply pile into the name, which in times of underperformance, such as now with just 11% of hedge funds outperforming the S&P as reported yesterday, is a short-cut means to generating modestly low-risk, high beta due to the collusive nature of all HFs rushing into the safety of one name all at the same time, that at least has some (arguably tenuous if indeed the leaked iPhone 5 photos are of the final thing) fundamentals propping the stock price. Sure enough, in the latest update, the hedge fund hotel California just got bigger once again for the 6th consecutive time, and as of June 30 a record 230 hedge funds were long the stock. We can only imagine how many more peripheral underperforming funds have joined the biggest hedge fund crowd ever since June 30 and have scrambled into the one stock that provides even a modest reprieve from the certainty of career-ending redemption requests come as soon as the September 30 redemption deadline, which is less than one short month away.



BTFD...Keep Stacking...

Gold Breaks To Three Month Highs

Last week it was Brent and Crude; yesterday it was Silver; and today Gold has broken out of its three-month range over $1640 - testing up to its 200DMA once again. Party on in tech stocks like its 1999 but don't forget the unintended consequence of all that free-money exuberance.

Trade War Escalates: China Threatens US Over Renewable Energy

They were never just going to sit there and take it. With the election cycle hotting up, the Chinese were an easy target for any and every finger-pointing blame game that US politicians were cornered with - but they are coming out swinging.  As WaPo (via AP) reports, China's government has ruled that US support to six US solar and wind projects violates free trade rules - and while they have pledged (promises are worth what exactly Mr. Draghi?) to cooperate in developing technology, they now accuse each other of improperly supporting their own producers and obstructing foreign competition (can't we all just get along in this centrally planned world?). At a time when WTI is breaking out (over $97) and Brent as EUR-priced highs, China's commerce ministry has called on Washington to stop the support and give 'fair treatment' to Chinese renewable products. These tri-party tensions - oh yes, Europe is involved too as in July the EU was asked to raise tariffs on Chinese solar cells - are only set to get worse as every nation attempts to unilaterally centrally plan and promote their own suppliers in the hopes of generating higher-paid jobs.

SP 500 - Telling Action

Entitlement Societies: Growth Implications

Admin at Marc Faber Blog - 43 minutes ago

Europe in particular and increasingly the United States, have become entitlement societies and that is very negative for economic growth, private initiative and so forth. - *in Bloomberg Radio* * **Related: SPDR S&P 500 Index ETF (SPY), Eurostoxx 50 Index* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

QE Is Coming, But Not Yet

Eric De Groot at Eric De Groot - 50 minutes ago

The stock market rallies, even when distrusted, do not setup bailouts, liquidity injections or what is generally terms quantitative easing (QE) today. History tells us that QEs come after the panic amid painful stock market declines. While another major QE is coming, it will be prefaced by a downside break in the US Federal budget counter trend rally illustrated in the chart below. Cycles... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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Please Shoot

Admin at Marc Faber Blog - 59 minutes ago

"If you put a gun to my head and said 'you must choose either Obama or Romney,' I'd say 'please shoot.'" - *in a recent interview * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

In the Mid-Sixties Wall Street Was A Wasteland

Admin at Jim Rogers Blog - 1 hour ago

When I went to Wall Street in the mid 60`s, it was a wasteland. I tell you, nobody went there. - *in a recent video 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.* 

 

Soaring Federal Welfare Recipients Despite Growing Labor Shortage Across America

Eric De Groot at Eric De Groot - 2 hours ago

Over 100 million now receiving federal welfare, yet California's $38 billion agricultural sector is facing a scarcity of labor that's leaving crops in the field. When asked if any local residents have come out to apply to work in the fields, Craig Underwood replied, "None. Absolutely none." He is even having trouble finding truck drivers and other semi-skilled labor for jobs that pay $12-$18... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Best Buy Best-est Dump

In the last two days, the venerable Best Buy has not only shot itself in the foot, but in the arm and leg - and potentially head too. Implicitly cutting hopes for a MBO-at-a-premium by hiring a new CEO (with de minimus turnaround experience), the company's earnings and conference call has confirmed that they will suspend their share repurchase scheme, reduced its annual earnings expectations, and has withdrawn guidance for fiscal 2013. As we warned the day of the Schulze-vaporware-MBO comment (which saw a spike from $17.63 to $23.55 at its highs that day) this was nothing but hot air and now it seems increasingly likely that not just the 68mm shares that Schulze owns now getting crushed 30% from those highs just over a week ago, but as AAPL has added a total BBY in market-cap this morning - and with the stock at near 10-year lows - we are afraid the commercial real-estate business will have some excess inventory very soon.



BTFD...

Russia Accumulates Gold As Consolidates Below Resistance At $1,644/oz

Russia continues to accumulate gold in its large foreign exchange reserves. The reserves include monetary gold, special drawing rights, reserve position at the IMF and foreign exchange. Russia’s central bank increased its gold holdings to 30.1 million troy ounces as of August  1st, from 29.5 million troy ounces a month earlier, according to a statement published on its website today. The gold reserves were valued at $48.7 billion at the end of last month, Bank of Russia said in a statement. Russia's gold and foreign exchange reserves rose to $510.0 billion in the week to August 10 from $507.4 billion a week earlier, central bank data showed last Thursday.  Russia's gold and foreign exchange reserves were $498.6 billion at the end of 2011. This means that Russia now nearly has some 10% of its foreign exchange reserves in gold bullion.

The Odds At 90%

Rule #1 that is cast in stone is "Preservation of Capital." There is certainly a place for some speculation at the edges but you do not, ever, put the core of your capital at risk. You may believe what you like about Europe. You may be wildly optimistic or incredibly pessimistic but what cannot be denied is that tremendous risk is currently present and that things could go wildly erratic in one direction or another. Economics, outside of the classroom, never exists without its cousin politics but the political considerations are now so huge and the money at stake is now so large that the sheer size of the capital on the table should and ultimately will give everyone pause. We are about to arrive at moments where the notion of "muddling through" will no longer be possible.

Daily US Opening News And Market Re-Cap: August 21

Tuesday has see little in the way of macroeconomic data, and much focus so far has remained on speculation over whether the ECB will buy periphery debt. Comments from the German ECB representative Jorge Asmussen overnight that he backs the ECB buying periphery debt as a means to prevent the "disintegration of the Euro", a seeming change in stance given that the Bundesbank continues to opposed such measures, lifted risk assets in early trade. As such, the Spanish and Italian spreads over the benchmark Bund are seen tighter by 12.9bps and 14.4bps on the day. Spain's 12- and 18-month T-bill was also well received, the country selling slightly more than the indicative range at EUR 4.512bln, with lower yields, though only the 18-month had a stronger bid/cover. Both the Spanish and the Italian 2-year yields have declined to lows last seen in May of this year. Similarly, two separate comments from German Christian Democratic Union (CDU) lawmakers concerning Greece and the possibility of making "small concessions" for the country so long as they lie within the existing programme also boosted risk appetite, as the probability of a Greek exit looks much less likely if it has the full support of Germany. Elsewhere, the UK unexpectedly posted a budget deficit in July as corporation tax receipts plunged, though this was slightly skewed due to the closure of Total's Elgin gas field in the North Sea. Today also saw UK CBI orders for August plunge, with the industrial order book balance at its lowest this year led by a weakening in the consumer goods sector.

Frontrunning: August 21

• German central bank warns country’s financial health not a given (WaPo)
• Secret Libor Committee Clings to Anonymity After Rigging Scandal (Bloomberg)
• Peru Declares State of Emergency to Quell Violent Mining Protests (Dow Jones)
• Euro-Area Economic Adjustment Only Half Complete, Moody’s Says (Bloomberg)
• Wall Street Leaderless in Rules Fight as Dimon Diminished (Bloomberg)
• China Swaps Drop From Three-Month High as PBOC Adds Record Cash (Bloomberg)
• China invest $1 billion in U.S. Cheniere's LNG plant, Blackstone to act as intermediary buffer (FT, Reuters)
• Romney Offers Lukewarm Support for Fed Audit - Hilsenrath (WSJ)
• U.K. Unexpectedly Posts Deficit as Corporation Taxes Plunge (Bloomberg)
• Obama issues military threat to Syria (FT)
• Merkel Allies Signal Concessions on Greece Before Samaras Visit (Bloomberg)
• Chinese banks warned of foreign exchange risks (China Daily)

A "Too Small To Matter" Greece Once Again Requests More Money

By now it should be painfully clear to involved that the Greek economy is nothing but a zombie, whose funding shortfalls and other deficit needs are sustained each month only courtesy of constantly new and improved "financial engineering" ponzi creations out of the ECB, the ELA, and other interlinked funding mechanisms which are merely a transfer of German cash into empty peripheral coffers. And while the attention of the world has moved on, at least for the time being, from the small country which has been left for dead with the assumption that Europe will do the bare minimum to keep it alive, but not more, Greece once again reminds us that not only does it still pretend to be alive, but that the zombie is getting hungry, and want to eat.










Today’s Items:

First…
They’re Running Out of Gold!… And Jobs
http://www.wealthwire.com

There’s a startling trend growing in Europe as families, many unemployed, run out of all their money – both fiat currencies and hard-money metals.   Portugal, historically known as the home of some of Europe’s biggest gold reserves, appears to be running out of gold.   It is getting to the point where married couples are selling their wedding rings to pay the rent.   In addition, the price of gold is bound to rise as the desperate global gold grab begins.

Next…
Chinese Gold Rush?
http://www.telegraph.co.uk

China has $1.2 trillion of its reserves in US dollars. With the indirect quantitative easing taking place, China may to be seeking to diversify the reserves held at the People’s Bank of China.   To that end, they will most likely be converting their paper reserves into real hard assets like physical gold and silver.

Next…
Goldman to Clients: Get Out of Stocks Before Fiscal Cliff Hits
http://www.cnbc.com

Goldman Sachs is advising its clients to find the nearest exit door when it comes to stocks.   Why?   Could it because they can predict the future, or they already know that the FED can no longer support the stock market?    Of course, they are going to blame it on Congress on tax cuts, however, Congress has been doing tax cuts and increases for decades without this level of panic from Goldman Sachs.

Next…
The Fed is Out of Bullets
http://www.silverdoctors.com

Unlike the Department of Homeland Insecurity, the Fed only has only one bullet left to shoot as it tries to re-ignite the economy, and it is quantitative easing.   Operation Twist was designed to create artificial demand for 10 and 30 year Treasuries; however, they are now out of short term paper.   The Fed now owns nearly 70% of the outstanding 10-year note inventory.   Expect to see Treasuries to increase in the not-to-distant future.    Also, if anyone expects “Goldman Sachs” Romney to keep his promise to Audit the Fed, they should really seek psychological counseling.

Next…
Silver Explodes out of the Cartel Cap
http://www.silverdoctors.com/

Yesterday, silver went vertical from $28.15 to $28.81.   It appears silver’s seemingly endless consolidation phase is ending, and silver is ready to embark on it’s next bull run. Remember, after preparing, keep stacking physical.

Next…
Feds Move to Strike Lewd Details from Homeland Security Sexual-Discrimination Lawsuit
http://www.nypost.com/

The government, like roaches, hate the light shown on them.  As it could have been predicted, the government does not like the light of truth being shown upon its senior administrators.   Without going into details, this suit appears to be showing more and more merit as the sex-for-promotion scandal at the Department of Homeland of Insecurity continues.

Next…
Mobile Phone Companies Can Predict Future Movements of Users
http://www.dailymail.co.uk

Based on ‘real time’ tracking that stored in a database, your Cellphone can predict, with a high amount of accuracy, where you will be tomorrow by a margin of just 60 feet.   This means that mobile phone providers, and by extension, the Department of Homeland Insecurity, will be able to predict the future whereabouts of their customers, or victims.

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

 

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