Monday, October 22, 2012

300 Fake Perth Mint Gold Bars Discovered in Australia As Chinese Gold ‘Forgery Factory’ Uncovered

from Silver Doctors:
Less than a month ago news broke that 10 PAMP gold bars filled with tungsten had been discovered in Manhattan.  An SD reader then discovered a Chinese firm openly promoting the sale and production of tungsten filled gold bars and coins.
The tungsten filled gold scandal has just gotten exponentially larger, as an Australian Seven News investigation discovered 300 fake Perth Mint gold bars and uncovered a Chinese gold ‘forgery factory’.
The investigators were able to purchase 300 Chinese sourced 1oz gold bars for a total of $300- and to no one’s surprise, when the investigators melted down the bars, all 300 were discovered to contain roughly the same gold content as Fort Knox
Seven News reports:
Read More @ Silver Doctors

Deer Voters: Here Is Why You Will Get Just What You Deserve On November 6

  We know it's Monday and Monday is not a day to joke around; but in light of this evening's debate and our nation's ever-decreasing educational prowess (and yet stable voting capability - i.e. everyone gets a vote!), we thought this clip (via Monty Pelerin's World) summed up perfectly how someone who seemingly sounds so well-spoken and lucid can be so utterly and completely clueless. The first minute will whet your appetite but listen on for the full logic of why deer crossings should be moved from busy highways...

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Stocks Dangle At The Bernank-Draghi Cliff's Edge (Again)

Presented with little comment - but we are here once again. Who will play Sylvester Stallone in this Cliffhanger?

The Bernank Set To Unveil Number Larger Than "Eternity"

It was just over a month ago that the Chairsatan formalized the incorrect named QE 3, aka the open-ended QEternity, whose purpose, for now, was to increase the Fed's balance sheet by $40 billion/month in new MBS purchases. Well, according to MarketWatch, whose previously unheard of Greg Robb is seemingly vying for the role of Jon Hilsenrath, Ben Shalom is preparing to unveil a number bigger than eternity: " After historic changes last month, Federal Reserve officials this week will discuss a possible expansion of the size of its third round of bond buying and better ways to guide markets about future policy actions." Just because $40 billion per month in new flow is apparently not enough, and because the market is now well below the level it was when "QE 3" was announced.

What Economic Recovery? Your Taxes At Work?

Dave in Denver at The Golden Truth - 4 hours ago
I'm going to do a post on the bogus housing "recovery" but it will require some extra work. As a teaser, based on the data and analysis I've looked at - in conjunction with and confirmation of my own thinking - the so-called "housing recovery" as its being promoted in the media is as phony and manipulated as any other economic statistic. But for the amount of time I have to post something today, I wanted to unload some news reports that irritate the crap out of me, which means you'll have to read them if you decide to read my post today. To begin with, lets shoot down this notion th... more » 

Texas Instruments Cuts Q4 Revenue And Earnings Forecast

At this point saying Texas Instruments guides lower is about the most habitual thing about this broken market, aside from the traditional Fed-Citadel juiced 3 pm ramp, of course. Sure enough, moments ago the analog circuits company announced results which were modestly better on the bottom and top line (following repeated earnings guidance lower), and yet which did the usual TXN thing and slashed guidance:

  • SEES 4Q REV. $2.83B-$3.07B, , EST. $3.22B
  • TI SEES 4Q EPS 23C-31C, EST. 37C
Just a tad. And, amusingly just as we predicted moments ago that in a ZIRP environment CapEx will be the first thing let go, here is TXN announcing it is slashing its full year growth spending forecast by 30%:

Of course who needs to invest in future revenue growth when the Fed has toner. The market, which is back to responding in absolute bizarro fashion is taking the latest disappointment in short squeeze stride, and has even managed to push the stock higher in the after hours session.  

Amazon Cloud Crashes, Takes Part Of Web Offline

Curious why there are those with an online business, who believe that handing over their entire back office infrastructure to one company, aka "going cloud" may not be the wisest of ideas. Just ask all those websites that use Amazon's cloud service today, who suddenly went dark when the Amazon cloud crashed.  From the NYT: "Amazon’s data centers in Northern Virginia crashed Monday afternoon, taking with it a number of popular Web sites, from Someecards, the quirky e-card company, to mobile applications like Flipboard and Foursquare.  Amazon reported having problems with the data centers in Northern Virginia. Those problems appear to have had a ripple effect across the Internet with several sites hosted on Amazon’s popular EC2 cloud hosting service also reporting problems."

Monster (Pre-Debate) Ramp Sends Stocks Vertical In last Hour

What can we say? All makes perfect sense: earnings dismal (worse than expected) means BTFD and if there is one lever to do that effectively given the massive over-exposure in every levered fund in the world, its AAPL. A 4% rally in AAPL - which perfectly topped out at Thursday's closing VWAP - was enough to drag stocks comfortably green by the close with a near-vertical ramp in S&P futures just to help things along. Seems like the standard pre-debate rally that we warned about last week - so let's not get too carried away by today's 'all-is-well' rally. Broadly speaking, risk-assets did not dip as hard as stocks and the ramp into the close (which as is typical) pulled stocks back up to 'fair' - but with the inevitable overshoot. While we leave up to our readers to divine the implications of such outlier moves on debate days, our only suggestion for those who have missed their opportunity to buy the central bank policy vehicle, formerly known as the S&P 500, with both hands and feet, is to wait until the next presidential debate and go all in. After all, "it's only fair" that the market will soar hours ahead of the two teleprompter-less candidates debating highly irrelevant stuff.

QBAMCO On Nominalists, Realists, And The Madness Of 'Chicago Plans'

The blinding nominal light of a Dow Jones Industrial Index near pre-crisis highs is enough provocation for most of the well-assuming US citizenry to 'believe'. Ahead of the third and final Presidential debate this evening, QBAMCO's Paul Brodsky and Lee Quaintance distill the listening audience into Realists and Nominalists. The critical difference between the two, which is described below, is hidden notably from view as the rhetoric within the institutionalized process of vetting and voting for our next President is narrowly focused, intentionally avoiding any major sticking points that will really bring change. As a result, they note, public policy and the people picked to craft and execute it have become anodyne; further implying that regardless of the outcome of the election, inflation will be the accepted manner of de-leveraging to be pursued; but the re-awakening of the so-called 'Chicago Plan' does acknowledge that significant monetary change is likely (for better or worse). Our leaders are dividing us with idealism and conquering us with vote counting. And yet... we all know it’s fake.

Monster Collapses On Death Reports: Space Catapult Advertising Gimmick Coming?

The irony of Monster Beverage's absolute 'Baumgartnering' cannot be lost on many in the market as news of incident reports released by the FDA show five people 'may' have died in recent years after drinking the energy drink. While the NYTimes notes that these reports do not prove a link between Monster Energy and the deaths or health problems, it would appear by the 18% plunge in the stock price that investors are not second-guessing. The company states it is "unaware of any fatality anywhere that has been caused by its drinks" but we suspect, just as NYC is now under the cosh of 16oz coke limits, soon enough we will see Caffeine Caps and Taurine Tariffs subjected on our un-Darwinian selves. In the meantime, may we humbly suggest the makes of the sugary energy drink undertake the (potentially job-saving or creating) manufacture of a giant catapult in an effort to be the first rubber-band-powered manned satellite launch in order to draw attention to the more important capabilities of people who drink Monster.

Dysfunctional, Dishonest, Insane, And Intolerable

Government programs created in the 1960s created a culture of dependency, government control, relentlessly higher debt, materialism, and willful ignorance. The incompetence, arrogance, ineptitude and insanity of government officials at the Federal, State, and Local level are stunning to behold. We need to ask ourselves whether we the people are getting better government service and efficiency today; with government spending at 35% to 40% of GDP, than we did in the 1950’s and early 1960’s when government spending was 20% to 25% of GDP. We doubt that most people are getting 60% more value from our benevolent government today than they did in the 1950’s. By encouraging dependency and reliance upon the all-powerful government, the motivation to educate yourself, get married before having children, work hard, and pull yourself out of poverty is diminished. Can a small minority of critical thinking citizens lead a revolution that topples the existing social order and restores the Republic to its founding principles of liberty, self-responsibility, civic duty, and mutual obligation to future generations?

No, Soaring Deficits Do Not Mean Record Corporate Profits: In Fact Just The Opposite

Over the weekend there appears to have been more confusion about pretty much everything finance related by aspiring CTRL-V majors-cum-'market experts.' In this specific case, the correlation between the soaring US deficit is magically supposed to imply the causation of surging corporate profits. Standalone this would be wonderful, because in a socialist utopia thought experiment, where one could hit infinite deficits funded by some magic MMT money tree, corporation would make, well, an infinite amount of profits, and would be an incentive for the government to spend itself to oblivion. And everyone would be happy right: infinite corporate profits means at least some trickle down wealth, and infinity even minus a big number is still infinity, meaning full employment for everyone. Hence utopia. Idiocy of this conclusion aside, the bigger problem with making the biggest rookie mistake in finance (and statistics), namely confusing correlation with causation, is that it is, as usual, 100% wrong when presented with one counterfactual. And when it comes to counterfactuals of soaring deficits, one always goes to the place that has "been there and done all of that" before. Japan.

Risk Appetite At Extreme Highs Signals Risk-Off To Come

While Tom Lee may well spit out his morning tea at yet another one of his truisms smashed  in front of his eyes, it seems that not only is the market the most net long it has been since the top in 2008, but now Barclays proprietary risk appetite index has reached extreme bullish levels - signaling contrarian-wise, consolidation at best and a more significant sell-off typically. It is oh-so-annoying when the facts get in the way of a good wall-of-worry-climbing, money-on-the-sidelines-spewing, beta-performance catch-up chasing market rally that appears to have stalled - especially when your year-end target is inexorably rising...

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