No Longer A "Barbarous Relic," Gold Is A "High Quality Liquid Asset"

Dave in Denver at The Golden Truth - 1 hour ago

*The initiative is supported by the World Gold Council, who recently submitted evidence to the Basel Committee for gold to be included in banks' "Tier 1" assets by European banking regulators, recognising gold’s growing relevance as a high quality liquid asset.* The "initiative" refers to the decision by LCH.Clearnet (London Clearing House) - the world's largest clearing agency for fixed income securities - to accept gold as collateral for "clearing" trades. This is huge. Here's the press release: LINK For those who don't know, every trade for every security needs to "cleared" ... more » 

Find The Freudian Slip

As the title suggest, please find the Freudian slip:

• JUNCKER SAYS ECB REMAINS INDEPENDENT OF POLITICS
• JUNCKER SAYS EU MAY NEED TO REVIEW GREEK AID PROGRAM
• JUNCKER SAYS EFSF COULDN'T HANDLE ANY ITALY RESCUE
• JUNCKER OPPOSES FURTHER EXPANSION OF EFSF

Hint: it is bolded.

Shorting Opportunities

Admin at Marc Faber Blog - 2 hours ago

Seeking Alpha posted a short summary of the latest Gloom, Boom & Doom Newsletter. Here`s the shorting opportunities section: *"Short Opportunities - There is no doubt about it; shorting in this kind of manipulated market is dangerous, but if you must, here are a few ideas: Apple (APPL), Amazon (AMZN), and Salesforce.com (CRM). Only short these with very tight stops."* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

more »

Shorting Opportunities

Admin at Jim Rogers Blog - 3 hours ago

Seeking Alpha posted a short summary of the latest Gloom, Boom & Doom Newsletter. Here`s the shorting opportunities section: *"Short Opportunities - There is no doubt about it; shorting in this kind of manipulated market is dangerous, but if you must, here are a few ideas: Apple (APPL), Amazon (AMZN), and Salesforce.com (CRM). Only short these with very tight stops."* *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 Time... more » 

 

SIlver Is Going Substantially Up In The Next Decade

Admin at Jim Rogers Blog - 3 hours ago

"Silver is likely to go substantially up in the next decade." - *in recent interview with CNBC* Related ETF: IShares Silver ETF (SLV) *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.*

De Tijd Reports Dexia To Be Nationalized

As predicted, the Dexia "bad bank" rumor lasted all of, oh, 24 hours. After exhausting all talking points, French and Belgian politicians took out the abacus and were horrified to learn, as we suggested, that any implicit backstop would cost them dearly, and in France's case, at least one A of those critical AAAs that continue to keep Europe afloat. So implicit moves to explicit and as Belgian De Tijd reports, "the Belgian government will nationalize Dexia Bank Belgium." From the article: "the federal government came together this morning to rule on the future of Dexia Bank Belgium. There were several scenarios on the table. One was the nationalization of Dexia Bank Belgium (DBB) . This means that the Belgian state will buy DBB to quickly resell in the future. The disadvantage of this scenario is that the shareholders suffer most because they are left with the unhealthy parts of the group (the bad bank)." It also means that Belgium can kiss its sterling credit rating goodbye, and its CDS will continue going up until it meets that of Dexia, which will now have the same implied risk as that of the government about to consume it. Two questions arise next: will the website of Dexia be down indefinitely as locals decide that keeping their money in an insolvent bank may not be the best option, and, secondly, who will nationalize a governmentless Belgium next?

Bank Of England Expands QE By £75 Billion To A Total Of £275 Billion, Keeps Rate Unchanged

As many expected, the Bank of England has followed in Bernanke's footsteps and proceeded with extra QE, 75 billion extra, or about 25 billion more than consensus - this is the first expansion in the British QE since November 5, 2009 when it did the latest  £25 billion expansion. Unfortunately, this is just the beginning: much more global QE is coming down the line as the "monetary authority" realizes it only has itself and its printers to rely on in a world rapidly reentering recession.

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Dexia Suspended

After the stock tumbled 20% on the day, and 45% in the past week, the life support plug appears to have been mercifully pulled. Next up: Dexia's website experiences a "bank of america" moment?

Anti-POMO Sees Fed In $9 Billion Bond Sale First

In a first for the Fed, 15 minutes ago the Fed started its first anti-POMO, or outright bond sale, this time for up to $9 billion in bonds due between 01/15/2012 – 07/31/2012. This is liquidity taken out of the market (think reverse repo) and money that can not be used to buy Netflix by the primary dealers. As a result, the recent (massively levered: thank you HFT in FX and 200x margin) surge in the EURUSD would make sense, as the last thing the market needs is for the robots to find a correlation between inverse POMO days and market drops, which would then be front run on any of the next anti-POMO days. The operation will conclude at 11 am EDT. Expect to see an end to the EURUSD rise as soon as the operation is concluded.

Sarkozy Advisor Says French Bank Recapitalization "May Be Necessary"

A rather cryptic message from Sarkozy advisor Henri Guaino who, quoted by Bloomberg while speaking at an interview in Yerevan, Armenia said that the French government "isn't planning to take stakes in banks" and adding that "this isn't envisaged at the moment." At the moment no, but after the moment? He concluded with the ominous: "maybe a recapitalization will be necessary." So who will be the next Dexia? An inquiring market wants to know. And did the market, in its latest manifestation of Korsakoff syndrome, already forget that yesterday it was announced that 'France Has Prepared An Emergency "Just In Case" Nationalization Plan For "2 Or 3" Banks." But when the next bank implodes, a multi-trillion French one to be sure, everyone will be stunned, stunned, as usual.

Art Cashin On #OccupyWallStreet, Marlon Brando And Ann Coulter

The daily dose of truth from the UBS veteran, as indispensable as morning coffee. Today, he covers Steve Jobs passing, the "Barroso" market, and the Occupy Wall Street movement in his unique and traditionally laconic way.

Market Snapshot: Reaction To Trichet - We Are Not Impressed

Out of the gate, credit and equity markets seemed happy that Trichet was offering CBPP2 and a Euro-TLGP II program in Oct/Dec but that quickly subsided (what no rate cut?) as rather surprisingly the market realized for itself - with little cajoling from us - that while short-term roll risk was reduced, capital still remains a 'problem' as the seemingly known (haircuts/exposures) unknowns and we assume unknown unknowns (contagion impact) remain tangible and this does nothing solve the underlying problem of insolvency. We were pleasantly taken aback by this reaction (and not in a Schadenfreude manner) but more simply that the market is 'getting it' - kicking the can by extending more and more credit (as Peter Tchir alluded to earlier) simply has its limits - and perhaps we are there.

Summarizing The ECB's Press Conference Disclosures

Update: "a word out of line" - Trichet says not appropriate to leverage the EFSF... Not what the market wanted to hear.
On one hand, the ECB keeps Germany happy with no rate cut, on the other, he promises as much liquidity as possible (but probably not enough - see below) and paints a very bleak picture of the economy in the period ahead.  Bottom line: no recapitalization from the ECB, but the central bank will make rolling of existing debt as easy as possible, and allow insolvent European banks to pledge any assets they have for cool cash.

Is There A Table Limit?

Europe is in the midst of doubling down again.  In May 2010, Europe was going to save Greece to prevent the "problems" from spreading into Ireland and Portugal.  In August 2010, Europe decided to save Ireland, Portugal, and provide more to Greece to stop the problem from spreading.  In early 2011, Europe starting buying Italian and Spanish bonds in addition to Portuguese, Irish, and Greek bonds to stop the spread of the "problem" into Italy and Spain.  In July, they increased the effort to save Italy, Spain, Portugal, Ireland, and Greece so the "problem" wouldn't spread to the banks.  Now, in October, they are going to save Dexia and the banks and Italy, Spain, Ireland, and Greece, to save the world. It is not too late for Europe to stop the madness.  Let Greece default.  Let Portugal and Ireland negotiate real haircuts on their debt.  Let some weak banks (even large weak banks) fail. Then provide support.  Support the best of the rest.  Provide infusions.  Create new institutions where necessary.  Stocks will be lower, but a floor can be provided.

Jobless Claims Back Over 400K, 26th Week In A Row Over 395,000

Somehow the robotic knee jerk reaction to claims surging back to over 400k, which means the economy is not creating jobs, was enough to generate a jump higher in futures, confirming the market is now only and all about wild momentum swings and attempts to sucker other suckers in. And another way to spin at the data: this is the 26th consecutive week of claims of 395,000. In summary: In the week ending October 1, the advance figure for seasonally adjusted initial claims was 401,000, an increase of 6,000 from the previous week's revised figure of 395,000. The 4-week moving average was 414,000, a decrease of 4,000 from the previous week's revised average of 418,000. The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending September 24, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 24 was 3,700,000, a decrease of 52,000 from the preceding week's revised level of 3,752,000. The 4-week moving average was 3,739,000, a decrease of 9,750 from the preceding week's revised average of 3,748,750. Americans on EUCs and extended claims tumble once again as more and more people formerly sponsored by the US government hit the 99 week cliff - 1.6 million people have now dropped from extended benefit rolls in one year - these are people who have virtually no hope of finding any remotely competitive job having been out of the work force for 2 years. But yes, take futures higher: nothing but good news here.

Frontrunning: October 6

• Steve Jobs "may never be equaled" (Reuters)
• Secret panel can put Americans on "kill list" (Reuters)
• Michael Lewis: California and Bust (Vanity Fair)
• Europe’s Rescue Fund is Only Last Resort (Bloomberg)
• EC To Propose Coordinated Action On Bank Recapitalization (MNI)
• SNB Foreign Currency Reserves Climb to Record (Bloomberg)
• Geithner Says Europe Debt Crisis Poses Risk to Global Growth (Bloomberg)
• Repatriation Tax Holiday to Be Proposed by Hagan, McCain (Bloomberg)
• China Tests US With Currency Move (FT)

Knee Jerk Responses To BOE "Aggressive" QE Expansion

Reuters summarizes the immediate responses from Wall Street on the BOE's surprising and substantial QE expansion.