SocGen Sees $600 Billion QE3 Starting In March 2012 Sending Gold Up Between $1900 And $8500/Oz
SocGen has released its much anticipated Multi Asset Portfolio Scenario/Strategy guide titled simply enough "Patience: bad news will become good news"
where, as the insightful can guess, the French bank makes the simple
case that the worse things get, the stronger the response by global
central banks will be. Here is the key quote for those worried that : "A
major liquidity crisis should not occur this time, as we think we are on the eve of major QE in the UK, US and (a bit) later on in the EZ."
We don't disagree and if there is anything that can send BAC higher it
will be the announcement of QE3. Of course, BAC will first drop to a
$2-3 handle so question is who has the balance sheet to hold on to the
falling knife. The next question is "How big will QE3 be"? Well,
according to SocGen, the Fed will preannounce it in the January 2012
FOMC statement, the monetization will last from March 2012 until the end
of the year, and will buy a total of $600 billion. We believe the
actual LSAP total (not to be confused with the "sterilized" QE3 known as
Operation Twist) will be well greater, probably in the $1.5 trillion
range as the Fed will finally say "enough" to piecemeal solutions. As to
what to do, besides going long some financial stock and hoping it is
not the one that is allowed to fail, SocGen has some simple advice: "Buy gold ahead of QE3 as money creation has a strong impact on prices" - in other words just as we suggested yesterday courtesy of the Don Coxe correlation chart.
Why gold and not BAC? Because, "Gold is highly sensitive to US QE, as
every dollar of QE goes into M0, triggering the debasement of the USD. Gold = $ 8500/Oz: to catch up with the increase in the monetary base since 1920 (as it did in the early 80s). Gold
= $1900/Oz: to close the gap with the monetary base increase since July
2007(QE1+QE2)." So go long a bank that may well go bankrupt and return
nothing before it at best doubles, or go long a real asset, which will
always have value and may quadruple in short notice? The answer seems
simple to us...Gold and Silver Rise/Markets rebound on positive Black Friday results
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 minutes ago
Good
evening Ladies and Gentlemen:
The stock market was primed to rebound with news of good "Black Friday"
sales and also reports that the IMF is contemplating spending 800
billion euros to rescue Europe. This has no chance of happening but the
Dow rose close to 300 points on the rumour.
Let us head over to the comex and see what transpired today. The price
of gold rallied by $25.30 toLa Tribune Reports S&P May Put France On ‘Negative’ Outlook Within Ten Days
For our French speaking readers, this makes it all too clear: "Selon plusieurs sources contactées par La Tribune, l'agence de notation Standard & Poor's pourrait préparer la France à la perte de son "triple A"."Fitch Revises US Outlook To Negative
French Fitch strikes back at the US for not pushing the Fed to do more to bail out Europe. Now it is US Moody's and S&P's turn..." The Negative Outlook indicates a slightly greater than 50% chance of a downgrade over a two-year horizon. Fitch will shortly publish its revised economic and fiscal projections for the U.S. and will conduct a further review of its sovereign ratings in 2012. However, in the absence of material adverse shocks, Fitch does not expect to resolve the Negative Outlook until late 2013, taking into account any deficit-reduction strategy that emerges after Congressional and Presidential elections."Volume Explosion Sends ES Higher As Treasuries End Unchanged
UPDATE: Post Fitch's US outlook change, TSYs are unch and Gold is +$7 (more likely on our SocGen QE3 post)
30Y Treasuries rallied 14bps from high to low yield today peaking at the US equity day session open and troughing just prior to the late day vertical ramp-fest that managed to turn what was heading to be a mediocre day into a headline-grabbing risk-fest. Unfortunately, stocks were the only asset class enjoying this exuberance as Oil lost over 2.5% from its highs, AUDJPY and FX in general drifted lower all day and copper and silver slid after Europe's close. The huge burst in volume which ripped us back to VWAP in ES and several of the financials (as BAC was heading towards a $4 handle) was very notable and dragged ES back away from a critically risk-off performance day in CONTEXT. Credit notably underperformed equity and did not partake in the screaming reach for risk in stocks at the close with financials actually much more aggressively net sold in corporate bond land and high-yield bonds seeing selling pressure also.
Risk on - Everything got fixed overnight
Trader Dan at Trader Dan's Market Views - 51 minutes ago
Talk about potential IMF loans to Italy had everyone feeling slap-happy in
today's trading session, especially seeing that the finanical world did not
come to an end over the US Thanksgiving holiday weekend.
Back on came the risk trades; up went the equity markets; up went the
commodity markets in general and down went the US Dollar.
Both gold and silver moved higher with silver leading the way in this "risk
environment".
If you note the gold chart below, it ran to $1720, the next resistance
level noted on the chart, where it then encountered some selling pressure
which kept it fro... more »
No free markets anymore, just manipulations, Faber tells King World News
Secret Fed loans helped banks net $13 billion
Submitted by cpowell on Mon, 2011-11-28 17:50. Section: Daily Dispatches
Most
of the Federal Reserve's gold records, sought by GATA's federal
freedom-of-information lawsuit, remain secret. Outside the Fed itself,
only two people claim to know everything the Fed is doing secretly in
the gold market -- Kitco gold market analyst Jon Nadler and CPM Group
Managing Director Jeff Christian. And they say the Fed is doing nothing
secretly there.
By Greg Hunter’s USAWAtchdog.com
Dear CIGAs,
It looks like the EU is getting a bailout from the IMF that could be nearly $800 billion. Gold is going straight up, and I am sure global stock markets will also surge on the bailout news. This will not really fix what is wrong. It will also not put an end to the chronic crisis mode Europe and the U.S. have been in for the past 3 years. I mean, if all the global bailouts didn’t fix the problem, including $16 trillion pumped out by the Fed after the 2008 meltdown, what’s another $800 billion going to do? The reason why things are not going to get better is that corruption is rampant and the financial system is totally broken. Bailouts are treating the symptom, but the disease is unbridled fraud. Many people don’t realize this because the corporate controlled mainstream media will not report on crimes of the financial elite.
Last week, I wrote a piece called “False Narrative.” I was stunned by a comment from a guy named Jim that said, “It amazes me that you maintain the narrative of the “guilt” of private business that asked for consideration from Congress and the president and it was granted. Nobody has gone to jail because no laws were broken.” This is the most false of the false narratives. The 2008 meltdown is 70 times bigger than the S&L crisis of the 1980’s and early 1990’s. Back then, more than 1,000 financial elites were convicted of felonies. According to Professor William Black, the reason why we have “recurrent intensifying crises . . . is these epidemics of fraud from the C-Street—from the CEOs and CFOs.” Professor Black holds duel PhD’s in economics and law, but he is not just some run-of-the-mill academic. Professor Black is also a former bank regulator who spearheaded the cleanup of the S&L crisis. In a speech Black gave last week, he said, “In the Savings and Loans crisis, the inevitable National Commission said that fraud was invariably present at the typical large failure. In the Enron era, always frauds from the very top of the organization, and in this crisis the frauds came from the very top of the organization again. But what’s different in this crisis? In this crisis, the same agency that I worked with that made over 10,000 criminal referrals in a tinier crisis made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street. And if they can defraud us with impunity they will cause crisis after crisis and they will produce maximum inequality. . . . And that’s why we have a crisis and it came from the very top of these organizations, and it went through—as the FHFA said in its complaint—the largest banks in the world were endemically fraudulent. It is not a few rotten apples. It is an orchard of one percenters who are rotten to the core.” (Click here to read his complete speech.)
More…
That
the American and global economies are being transformed by the forces
of globalization, demographics, and over-indebtedness is
self-evident. What is less self-evident is the impact this
transformation will have on the future of work, earned income, and
financial security. The key question an increasingly vulnerable
workforce is asking is: What skills will be in demand once this transition occurs? In
order to answer this question, it's necessary to understand the macro
trends that will shape the nature of employment in this new era. In our
previous look at The Future of Work,
we focused on the US economy’s dependence on debt as a driver of
growth and found that debt saturation was correlated with declining
employment. But there are many other long-term dynamics influencing the
economy, and no survey of the future job market would be complete
without considering these other factors.
CNBC Favorite Dick Bove Admits To Being Wrong On Banks, But For The Right Reasons, But Those Reasons Are Still Wrong!!!
Dear CIGAs,
It looks like the EU is getting a bailout from the IMF that could be nearly $800 billion. Gold is going straight up, and I am sure global stock markets will also surge on the bailout news. This will not really fix what is wrong. It will also not put an end to the chronic crisis mode Europe and the U.S. have been in for the past 3 years. I mean, if all the global bailouts didn’t fix the problem, including $16 trillion pumped out by the Fed after the 2008 meltdown, what’s another $800 billion going to do? The reason why things are not going to get better is that corruption is rampant and the financial system is totally broken. Bailouts are treating the symptom, but the disease is unbridled fraud. Many people don’t realize this because the corporate controlled mainstream media will not report on crimes of the financial elite.
Last week, I wrote a piece called “False Narrative.” I was stunned by a comment from a guy named Jim that said, “It amazes me that you maintain the narrative of the “guilt” of private business that asked for consideration from Congress and the president and it was granted. Nobody has gone to jail because no laws were broken.” This is the most false of the false narratives. The 2008 meltdown is 70 times bigger than the S&L crisis of the 1980’s and early 1990’s. Back then, more than 1,000 financial elites were convicted of felonies. According to Professor William Black, the reason why we have “recurrent intensifying crises . . . is these epidemics of fraud from the C-Street—from the CEOs and CFOs.” Professor Black holds duel PhD’s in economics and law, but he is not just some run-of-the-mill academic. Professor Black is also a former bank regulator who spearheaded the cleanup of the S&L crisis. In a speech Black gave last week, he said, “In the Savings and Loans crisis, the inevitable National Commission said that fraud was invariably present at the typical large failure. In the Enron era, always frauds from the very top of the organization, and in this crisis the frauds came from the very top of the organization again. But what’s different in this crisis? In this crisis, the same agency that I worked with that made over 10,000 criminal referrals in a tinier crisis made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street. And if they can defraud us with impunity they will cause crisis after crisis and they will produce maximum inequality. . . . And that’s why we have a crisis and it came from the very top of these organizations, and it went through—as the FHFA said in its complaint—the largest banks in the world were endemically fraudulent. It is not a few rotten apples. It is an orchard of one percenters who are rotten to the core.” (Click here to read his complete speech.)
More…
Guest Post: The Future Of Jobs
That
the American and global economies are being transformed by the forces
of globalization, demographics, and over-indebtedness is
self-evident. What is less self-evident is the impact this
transformation will have on the future of work, earned income, and
financial security. The key question an increasingly vulnerable
workforce is asking is: What skills will be in demand once this transition occurs? In
order to answer this question, it's necessary to understand the macro
trends that will shape the nature of employment in this new era. In our
previous look at The Future of Work,
we focused on the US economy’s dependence on debt as a driver of
growth and found that debt saturation was correlated with declining
employment. But there are many other long-term dynamics influencing the
economy, and no survey of the future job market would be complete
without considering these other factors.CNBC Favorite Dick Bove Admits To Being Wrong On Banks, But For The Right Reasons, But Those Reasons Are Still Wrong!!!
11/28/2011 - 15:50
11/28/2011 - 15:43
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