Tuesday, October 9, 2012

Santelli Slams 'Surprise' Unemployment Data In Epic Screamfest

While careful not to get drawn into the conspiracy-theory wonk camp, CNBC's Rick Santelli just connects the dots on last week's miraculous unemployment rate. In one of the most voluminous rants we can remember, Santelli - from a position of realist (and market whisperer) - argued with Liesman - from a position of 'but, but, the data must be true' - and summed it all perfectly "if I told you that you'd win the lottery tomorrow, and you did; wouldn't you wonder how did I know that?" With Langone also chipping in that he does not see anything in his business to suggest unemployment is improving at all - we think the bigger elephant-in-the-room is the Liesman 'comfortably-numb' line-of-questioning on "why did you think last month that this month's unemployment rate would be under 8%"; i.e., why did you think there would be manipulation? The answer is pretty obvious, especially as Santelli was proven 100% correct - "the current trend of these [jobs] numbers is so different from the current trend of any other numbers. If you were looking for conspiracies (and I'm not), you only need to change a certain number." Must Watch!

Wake Up Media, the BLS Has Been Fudging Its Numbers for YEARS

Phoenix Capital...
10/08/2012 - 18:05
  How does the US economy add 800K+ jobs during a month in which employment taxes and consumer spending FALL? Answer: magic! Or actually the BLS lied... again.   

Bill Gross' Advice To Asset Managers: "Turn Lead To Gold"

At least he did not say Tungsten...
Presenting the SmartKnowledgeU Daily Gold & Silver Videos...and How to Survive Financial Armageddon
10/09/2012 - 06:19
For those of you wondering why we are writing articles less frequently, as of about a month ago, we have decided to provide the majority of our commentary via Daily Videos about Gold & Silver...

What Will Benefit From Global Recession? The US Dollar

Many times what "should" happen does not happen. For example, global stock markets "should" decline as the global economy free-falls into recession, as global recession is not exactly an ideal scenario for rising corporate sales and profits or demand for commodities. Yet global markets are by and large rising significantly. Sometimes what "should" happen is simply being delayed. In other cases, some other dynamic is at work. Stock market bulls, for example, say the "other dynamic" is global money-printing by central banks, and this "easing" will power stocks higher even as sales and profits sag. Analysts who believe fundamentals eventually over-ride monetary manipulation believe the stock market decline has only been delayed, not banished. A similar tug-of-war is playing out between those who feel the U.S. dollar "should" decline in the years ahead and those who see the dollar strengthening significantly.

LIBOR-gate Comes To Crude: Total Exposes Price Fixing In The Energy Market

While the recent revelations of multi-year LIBOR manipulation (but, but how was that possible: it involved thousands of people, operating for years, manipulating numbers - all the traditional reasons presented against conspiracy theory crackpots alleging that manipulation may be going on here, or there, or at the BLS, or somewhere), which we had said had been happening for the past 3 years, confirmed that the entire rate-based derivative market was a giant scam, at least one market spared from cartel whistleblower, i.e., insider, humiliation, was the commodities market. No longer. As the FT first reported, a Swiss trading office of Total Oil Trading sent a response letter to IOSCO (the International Organization of Securities Commissions), alleging that the same kinds of market "pricing" shennanigans that have been now exposed to have taken place over bottles of Bollinger, may have been pervasive in the crude market as well.

Apple Correction Sends Risk Sliding

It seems, just as everyone knew but really did not want to admit, that AAPL is the core (pun intended) of the entire risk-rally. With the re-appearance of the bond-market this morning after their long-weekend, risk-assets everywhere have caught the tech companies' cold with EURUSD at one-week lows - back under 1.2900, S&P futures tumbling back towards pre-QEternity levels and having wiped out all of last week's gains, as AAPL is down over 2% (seemingly picking up speed once we noted the 10% iCorrection earlier). Oil is holkding gains while USD strength is sapping Silver, Copper, and Gold's performance. Treasuries have snapped back to low yields of the day (down around 4-5bps). VIX has snapped back above 16% (up around 1 vol).

Why A Gold Standard, Alone, Is Not Enough

We have lately noticed that there is an ongoing debate on whether (or not) the world can again embrace the gold standard. We join the debate today, with an historical as well as technical perspective. The gold standard will be the last option: If adopted, it will be out of necessity and in desperation. We are not historians. In our limited knowledge, we note however that historically, the experiment of adopting a gold standard –or a currency board system- was usually preceded by extremely trying moments, including the loss by a government of its legal tender amidst hyperinflation. The change to a commodity standard has often been then out of necessity. In summary, the Argentine case and the Dutch Golden Age suggest that the elimination of the credit multiplier (i.e. extinction of shadow banking) is more important than the asset backing a currency.


AAPL is now down over 10% from its all-time high of $705.07 on 9/21... Will iCorrection become iBear market? Or will Gene Munster come out with some more magical, mystical "channel checks?"

Merkel Lands in Athens as Greek Debt Picture Darkens

Eric De Groot at Eric De Groot - 2 hours ago
Liquidity to infinity requires trust, cooperation, and above all confidence in leadership. "Seven thousand police officers and rooftop snipers and commandos placed to provide protection for the German leader" suggests all three are heading in the wrong direction. One impulsive mistake, an outcome consistently shown throughout human history, would not only derail global... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Growing Trend Energy Suggests Higher Prices

Eric De Groot at Eric De Groot - 4 hours ago
The behavioral urge to stand with the crowd is strong in humans. The ability to fight this tendency, though, often defines success or failure in the investment world. New highs in ADN(E) suggest growing trend energy. New highs while price lags badly favors a stock market rally, likely to new highs, until the window of time closes. Funny how the market always seems to send a bullish message... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Video: The Bearish Case

Admin at Marc Faber Blog - 4 hours ago
Related: SPDR S&P 500 ETF (SPY), iShares MSCI Emerging Markets Index ETF (EEM) *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Long Term Bonds: A Bull Market Coming To An End

Admin at Jim Rogers Blog - 5 hours ago
We have been in a bull market in long term bonds for 31 years. That bull market is coming to an end, eventually. Whether this week, this month or this year, I don`t know. But I am very skeptical of bonds anywhere. - *in a recent interview* *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.*

Golem XIV - Why Are We Bailing Out the Banks? Part 1


Charts Of The Day: 111 Years Of Federal Tax And Spending

With US Federal tax (mostly) and spending (far less) policy having become two of the key issues of the ongoing presidential debate, we wish to present to our readers 111 years of US revenue and spending data, both in absolute terms, and as a percentage of GDP.

The Housing Pain In Spain Has Not Bottomed

The pain in Spain is reaching the upper-class. Foreclosures has previously disproportionately affected lower-income immigrants but is now spreading to formerly well-to-do families, as Bloomberg Businessweek notes that they are running out of ways to pay mortgages in a deepening recession. Home price drops are re-accelerating as "repossessions are encroaching further into the city centers, like an overflowing river." The path to this end sounds very familiar as "Bank managers, who had aggressive targets to meet, did all they could to lend to those who wanted to carry on buying into the bubble" and the saddest case of all as parental guarantors were used to spread the risk as "The kids lose their homes, go live with mom and dad and then mom and dad lose the home that they worked all their lives to pay for because it backed their children’s debts."

Goldman Issues Strong Sell On Obama As Firm Refuses To Vote With Its Wallet

Confirming a move that will surprise exactly no one, the firm which is best known in the world for two things: i) arbitraging the gullibility of its clients, and ii) flipflopping faster than anyone when the narrative demands it, the WSJ reports that Goldman Sachs has mutated from Obama's biggest financial backer 4 years ago on Wall Street, to one of the most stingiest firms. "Employees at Goldman donated more than $1 million to Mr. Obama when he first ran for president. This election, they have given the president's campaign $136,000—less than Mr. Obama has collected from employees of the State Department. The employees have contributed nothing to the leading Democratic super PAC supporting his re-election. By contrast, Goldman employees have given Mr. Romney's campaign $900,000, plus another $900,000 to the super PAC founded to help him." In other words Goldman has just voted with their wallets, and the bottom line is "Strong Sell" with price target One Term.

Turkey Deploys 25 F-16s To Syria Border

Turkey has confirmed that it is deploying at least 25 additional F-16 fighter jets at its Diyarbakir air base close to the border with Syria. Al Jazeera reports that Erdogan, Turkey's PM, noted that he does not want war but needs to prepare for anything and at the same time NATO's secretary general has "all necessary plans in place to protect and defend Turkey if necessary."

Gold In Iran Soars By 23% In One Week As All Currency Transaction Tracking Disappears

Just over a week ago we we were the first to shed light on the reality of hyperinflation on the ground in Iran - and subtley suggested the whole thing could be watched in real-time. Soon after, a mysterious cabal of 16 currency manipulators was arrested and the Rial jumped dramatically higher (according to official sources) - as if by magic there was no problem at all. This all sounded a little too good to be true (just like unemployment rates in slightly more controlled economies). Sure enough, by the power of social media, we now know it was too good to be true.

Why The Big Overnight Move In EURUSD? Citigroup Explains

Just after 3:00 am Eastern, the EURUSD experienced a sharp large move lower, sliding by nearly 100 pips in under an hour, without what appeared to be a news catalyst (hardly that surprising in the New Illiquid Normal when one VWAP order can move risk by +/- 1%). For those curious what may have caused the sudden drop, here is one explanation from Citigroup.

Frontrunning: October 9

  • Rajoy’s Deepening Budget Black Hole Outpaces Spain’s Cuts (Bloomberg)
  • ECB May Need to Cut Rates Given Deflation Risk, IMF Says (Bloomberg)
  • Global Recession Risk Rises (WSJ)
  • Romney Leads Obama in Pew Likely Voter Poll After Debate (Bloomberg)
  • IMF Sees Global Risk in China-Japan Spat (WSJ)
  • Republicans shift tone on taxing the rich (FT)
  • Romney casts Obama's foreign policy as weak, dangerous (Reuters)
  • Europe Salutes Greek Budget-Cutting Will, Raising Aid Prospects (Bloomberg)
  • U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved (Bloomberg)
  • IMF Says Most Advanced Nations Making Progress Reducing Deficits (Bloomberg)
  • Eurozone launches €500bn rescue fund (FT)

Overnight Sentiment Liquid: IMF Cold Water And PBOC Reverse Repo Gusher

Overnight sentiment is decidedly negative, following the across the board cut of growth forecasts by the IMF late yesterday. The only bright light was the PBOC dumping 265 billion yuan ($42.1 billion) in reverse repos in an open-market operation (a liquidity adding operation) whose only purpose was to roll the massive reverse repo from before the Golden Week. The resulting 2% jump in the Shanghai Composite came as traders expect an imminent rate cut by the PBOC. The irony of course is that as long as Reverse Repos are the liquification instrument of choice, the local central bank will do nothing else in an economy which is once again overheating in several industries, the most important of which continues to be housing. Furthermore, as long as the spectre of a 15% surge in pork prices is over the horizon, the PBOC will do nothing. Period. Elsewhere, as BBG summarizes, FX is mostly modestly lower with the AUD outperforming on rising iron ore price. Metals mostly modestly lower despite the crippling South African strike which has now migrated to catch iron ore mines as well. Treasury yields moderately lower, partly in catch-up after yesterday’s holiday. Bund yields modestly higher sovereign-to German yield spreads mixed with mostly modest changes. Few if any macro economic news today.

Today’s Items:

Euro is Dead Currency Walking
Merkel, accompanied by snipers, commandos and 7000 plainclothes police for protection, is going to California err… Greece to try to save the dollar err… euro; however, many are coming to the inescapable conclusion that the euro is all but dead.    It was a stupid idea to hope that divergent economies could use the same currency; thus, it is past time to kill the euro.

Afghanistan 11 Years Later
Here are some results of the invasion of Afghanistan:
1. About 3200 dead soldiers – of which more than 2000 are Americans.
2. 6,500 veteran suicides each year – Or 1 every 80 minutes.
3. 12,000 civilian deaths since 2007 alone.
4. $4.4 trillion spent so far.

Romney Vows To Arm Al-Qaeda Terrorists In Syria
Like Obama, Romney will vow to arm Al Qaeda supported Rebels in Syria.    You know, the ones most likely responsible for lobbing shells into Turkey to start a major regional war.    Anyway, this only illustrates further that no matter which one of these two buffoons wins the Presidential election, we will all lose.

Who Destroyed the Economy?
Between the debt and out-of-control spending, Baby Boomer politicians are leaving behind a devastated economy for the children.     Since 1965, the public debt, as a percentage, of GDP has almost doubled.     Since 1965, Social Security and Medicare costs have gone from 3.93 to 8.55%, as a percentage of GDP.    Perhaps the lyrics for “Land of Confusion”  should be re-written to “We’re just making promises that we know we’ll never keep”

Copyright Resell In Danger
The Supreme Court is set to hear a case that could endanger garage sales, and your ability to legally resell items you legally bought, unless the copyright owner gets a kickback..   Of course, the more insane laws and rulings that are made, the more the Black Market, that cannot be taxed or regulated, will take over – which will accelerate the complete collapse of Federal government.

California Flip-Out
Aside from the gas prices going through the roof, Californians are dealing with…
1. Budget shortfalls.
2. High unemployment.
3. Pension problems.
4. Bankruptcy of Cities.
Sounds like a set-up for a major market crash in the near future folks.

24 of the Healthiest Fruits in the World
Here are a few… Avocados, bananas, blackberries, blueberries, cantaloupe, cherries, dragon fruit, grapes, and kiwi.    Eat up!

Big Bird Got Stimulated
In 2010, Sesame Workshop received over 1 million dollars in stimulus money and created 1.47 jobs in the process.  In short, this story is brought to you by the letter “W” as in waste and by the number zero – Which is the intrinsic value of the U.s. Dollar.

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

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