Doug Casey Addresses Getting Out of Dodge

The fact is that the US has been on a slippery slope for decades, and it's about to go over a cliff. However, our standard of living, while declining, is still very high, both relatively and absolutely. But an American can enjoy a much higher standard of living abroad. On the other hand, if I were some poor guy in a poverty-wracked country with few opportunities, I'd want to go where the action is, where the money is, now. Today, that means trying to get into the United States. The US is headed the wrong direction, but it's still a land of opportunity and a whole lot better than some flea-bitten village in Niger...This is one of the advantages of studying history, because it shows you that things like this rarely happen overnight. They are usually the result of trends that build over years and years, sometimes over generations. In the case of the US, I think the trend has been downhill, in many ways, for many years. Pick a time. You could make an argument, from a moral point of view, that things started heading downhill at the time of the Spanish-American War. That was when a previously peaceful and open country first started conquering overseas lands and staking colonies. America was still in the ascent towards its peak economically, but the seeds of its own demise were already sewn, and a libertarian watching the scene might have concluded that it was time to get out of Dodge –

The Can Kicking Is Ending - Key Upcoming Dates For Europe's Patient Zero

When it comes to the markets one can easily ignore the fact that the world is one big ponzi and things, as we know them, are coming to an end as long as the can can be kicked down the street at least one more time. In other words, without a hard deadline, there is nothing that can force change upon a system already in motion, no matter how self-destructive. Unfortunately, the clock in Europe is ticking as a deadline approaches, and somewhat poetically, the place where it all started is where it may end. In March Greece faces a redemption cliff: if by then the €130 billion promised to it by the Troika as per the July 21 second bailout, is not delivered, it is game over - first for Greece which will default, then for the ECB, which will be forced to write down holdings of Greek bonds, in effect wiping out its equity and credibility, and lastly, for the Euro, which will see a core member leaving (in)voluntarily.

Record Deposits at ECB?Hungary CDS hit record levels/Italy and Spanish bonds rise again

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 6 hours ago

Good evening Ladies and Gentlemen: Gold closed today at $1612.00 for a gain of $12.30.  Silver fell by 46 cents to $29.07 falling in sympathy with the drop of bourses in Europe.  The Dow recovered late in the day.  Today we witnessed the Euro deposits at the central banks climb to record levels as the banks shun the carry trade of LTRO.  Actually it is a carry trade in reverse as the banks have

Retail Investors Pull $140 Billion From Equity Funds In 2011 Which Close The Year With 19 Consecutive Outflows

The Santa rally into the year end was taken good advantage of by retail America. As ICI reports, in the week ending December 28, investors pulled another $3.988 billion out of domestic equity mutual funds (and $1.2 billion out of foreign equtiy funds). This represents the 19th consecutive outflow since a tiny inflow in mid-August, which if excluded would mean 36 consecutive weeks of outflows beginning in late April, or roughly the time when the market peaked. Altogether a whopping $140 billion has been redeemed from domestic equity-focused mutual funds, which compares to "only" $98 billion in 2010. Unfortunately for the permabulls, the rangebound market since then indicates that absent retail investors returning to the broken casino that is the equity market, the probability of another break out of previous high is slim to nil. In fact as the chart below confirms judging by how long the area chart has been negative (or in outflow territory), the only thing Joe Sixpack wants is to get his money out of the rigged ponzi scheme pronto. And the longer the market trades like an irrational, pustular (for all the 19 year old HFT Ph.D's out there) and outright rabid teenager, the more investors will just say no and park their cash in either taxable bond funds (another $1.2 billion inflow in the past week), in their mattress or in gold. And unlike the Fed, equity funds can not print their own money: given enough redemptions and the liquidation selling will be inevitable. It also means that following $140 billion in redemptions with the market ending unchanged, the leverage used by mutual funds, whose cash is already at record lows, must be at record levels. And we all know how "record leverage" situations end...

One Word...Volume

The S&P 500 closed practically unchanged today - recovering from decent selloff to a late-Europe-session low - amid volume that was over 30% lower than at the same time last year. Investment grade credit, the high-yield bond ETF HYG, and broad risk assets in general kept pace with ES (the e-mini S&P 500 futures contract) but high yield credit (tracked by the HY17 credit derivative index) outperformed considerably - moving to its best levels since late October. This disconnect appeared as much driven by technicals from HY-XOver (Long US credit vs Short EU credit) and HYG vs HY17 (a high premium-to-NAV bond ETF vs relatively cheap high yield spread index) trades as it was a pure risk-on trade. Elsewhere, the USD retraced only marginally the earlier gains of the day (with EUR hanging under 1.2950 by the close) as Treasury yields jumped 5-7bps more (30Y +14bps on the week now) as we can't help but notice the correlation between TSY weakness and EUR strength for a few hours this afternoon (repatriation to pay up for tomorrow's French auction?). Commodities were very mixed with Copper sliding notably (decoupling from its new friend Gold which rose and stabilized this afternoon over $1610) as Oil pushed higher all day (over $103) on Iran news and Silver leaked back this afternoon (under $29.5).

On Risk Concerns And Over-Optimism

The Citi Economic Surprise indices have been useful indicators for finding short-term turning points in risk assets for many years. While not perfect, the mean-reverting nature is very instructive as to economist over- or under-optimism through the cycle. A recent SocGen strategy report noted that since the US rating downgrade, the majority of US macro data have beaten consensus - driving the surprise index up to cycle highs (from dramatically bad cycle lows). It appears that the US economic surprise indicator has peaked again and economists are currently upgrading their forecasts. We noted earlier, that markets are getting very sensitive to misses and this turn in 'economic data relative to over-optimistic forecasts' performance creates significant room for disappointment and implicitly, equity underperformance.

Guest Post: President Obama, Demopublican

There is literally no difference between Obama and a moderate Republican when it comes to the truly important policies governing the nation's insolvent finances, its predatory financial sector, its corrupt and fraudulent sickcare system or its sprawling Empire. Obama's policies have all aided and abetted existing Status Quo cartels and fiefdoms. He has changed absolutely nothing of import except further eroding civil liberties. President Obama can be charitably characterized as an ineffectual Demopublican. From those demanding more, then he can be accurately described as a well-meaning puppet of Wall Street and the rest of the Status Quo cartels and fiefdoms.

Equity Valuations And The Jobless Recovery

Whether its our old friend Binky from Deutsche or Tommy Lee from JPMorgan, the uber-bullish permanence of these well-paid serial extrapolators seems to pivot critically for 2012's forecasts on one thing: multiple expansion. On whatever empirical metric the Bill Millers of the world look at, stocks are cheap - no matter the changing dynamics underlying the entire system that seems so obvious to the rest of us. As JPMorgan notes, even assuming a 15% earnings decline (possible since in Q4 2011, the percent of negative S&P 500 earnings pre-announcements matched its 2001 and 2008 peak) the S&P 500 is priced at the cheap end of history. The answer to why measures such as Price-to-Book and Price-to-Earnings have adjusted down so considerably is, however, very evident when once considers where the profitability has come. In contrast to prior recovery cycles, current cycle profits have been driven significantly by very low labor compensation. David Cembalest says it best: "Given the fiscal, social and political issues this creates, it’s hard to pay a very high multiple for this kind of profits boom."




Reggie Middleton Sets CNBC on F.I.R.E.!!!

Posted by: Reggie Middleton

Post date: 01/04/2012 - 12:12

Have we set the MSM on FIRE! Let's see if a trend was created. 18 hours after warning on the insurance sector, record losses were announced!!! 

 

 

 

 

 

34 Shocking Facts About U.S. Debt That Should Set America On Fire With Anger

from The Economic Collapse Blog:
We have all been lied to. For decades, the leaders of both major political parties have promised us that they can fix our current system and that they can get our national debt under control. As the 2012 election approaches, they are making all kinds of wild promises once again. Well you know what? It is all a giant sham. The United States has gotten into so much debt that there will be no coming back from this. The current system is irretrievably broken. 30 years ago the U.S. debt was a horrific crisis that was completely and totally out of control. If we would have dealt with it back then maybe we could have done something about it. But now it is 15 times larger, and we are adding more than a trillion dollars to the debt every single year. The facts that you are about to read below should set America on fire with anger. Please share them with as many people as you can. What we are doing to our children and our grandchildren is absolutely nightmarish. Words like “abuse”, “financial rape”, “theft” and “crime” do not even begin to describe what we are doing to future generations. We were the wealthiest nation on earth, but it wasn’t good enough just to squander all of our own money. We had to squander the money of our children and our grandchildren as well. America has been so selfish and so self-centered that it is hard to argue that we don’t deserve what is about to happen to this country. We have stolen the future of America, and yet we strut around as if we are the smartest generation that ever walked the face of the earth.
Read More @ TheEconomicCollapseBlog.com

THE WAR ON IRAN: The Deployment of Thousands of US Troops to Israel, The Integration of US-Israeli Command Structures

by Michel Chossudovsky, GlobalResearch.ca:
The Islamic Republic of Iran has been threatened with military action by the US and its allies for the last eight years.
Iran has been involved in war games in the Persian Gulf. The US Navy is deployed. Iran’s naval exercises which commenced on December 24th were conducted in an area which is patrolled by the US Fifth Fleet, based in Bahrain.
Meanwhile, a new round of economic sanctions against the Islamic Republic of Iran has been unleashed, largely targeting Iran’s Central Bank, leading to a dramatic plunge of Iran’s currency.
Reacting to US threats, Iran declared that it would consider blocking the shipment of oil through the Strait of Hormuz:

“Roughly 40 percent of the world’s oil tanker shipments transit the strait daily, carrying 15.5 million barrels of Saudi, Iraqi, Iranian, Kuwaiti, Bahraini, Qatari and United Arab Emirates crude oil, leading the United States Energy Information Administration to label the Strait of Hormuz “the world’s most important oil chokepoint.” (John C.K. Daly, War Imminent in Strait of Hormuz? $200 a Barrel Oil? Global Research, January 3, 2012)

Read More @ GlobalResearch.ca

Bull Market Tops Form In the Context of Greed and Euphoria, Not Fear and Despair

January 4, 2012, at 7:52 pm
by Eric De Groot in the category Technical Analysis |  Print This Post |  Email This Post

Massive breakout above a thirty year consolidation and everyone is scared to death?
Maybe if the chart was flipped upside down.

S&P Gold (Formerly Precious Metals Mining)* Turned Upside Down

Secular bull market, exhibiting massive breakout above multi-year resistance, end within the context of greed and euphoria, not fear and despair.

S&P Gold (Formerly Precious Metals Mining)*

 

 

Transcript Available of Jim’s Latest Ellis Martin Report

January 4, 2012, at 7:19 pm
by Jim Sinclair in the category General Editorial |  Print This Post |  Email This Post

Dear Friends,
The most recent interview with Ellis Martin of ellismartinreport.com is titled “Some Gold Stocks Are Bouncing Back.”
In this interview we further discuss my outlook for 2012.
Click here to read the transcript of the interview.
Jim Sinclair

 

 

In the News Today

January 4, 2012, at 12:57 pm
by David Duval in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary
Stefanmo’s work has great merit, offering you one more resource. Click on chart to access his blog site.

Jim Sinclair’s Commentary
The Board of Wizards that decide when a credit event is a default or not a default is the ISDA. If they decide a credit event is not a default then a Credit Default Swap such as the 50% Greek Haircut need not pay off.
They wield more power than many governments. Reading this will give you insight not common to the public.
International Swaps and Derivatives Association
From Wikipedia, the free encyclopedia
The International Swaps and Derivatives Association (ISDA) is a trade organization of participants in the market for over-the-counter derivatives. It is headquartered in New York, and has created a standardized contract (the ISDA Master Agreement) to enter into derivatives transactions. In addition to legal and policy activities, ISDA manages FpML (Financial products Markup Language), an XML message standard for the OTC Derivatives industry. ISDA has more than 820 members in 57 countries; its membership consists of derivatives dealers, service providers and end users.[1]
History
ISDA was initially created in 1985[2] as the International Swap Derivatives Association and subsequently changed its name switching swap dealers to Swaps and Derivatives. This change was made to focus more attention on their efforts to improve the more broad derivatives markets and away from strictly interest rate swap contracts.
More…





Jim Sinclair’s Commentary
If the Fed is to hold interest rates close to zero as promised, and have any success on the long bond, Twist strategy QE 3 must come. Technically there is a battle taking place on the long end.


Fed to publish rate path forecasts in transparency move
WASHINGTON | Wed Jan 4, 2012 8:48am EST
(Reuters) – The Federal Reserve, in a move that could push back expectations of when near-zero U.S. interest rates will rise, will begin publishing its policymakers’ forecasts for borrowing costs.
The step is a significant milestone in Fed Chairman Ben Bernanke’s push for greater policymaking transparency, and it could offer the economy a bit more of a lift by better aligning financial market bets with the main view at the central bank.
The Fed has held the overnight federal funds rate close to zero since December 2008 and has bought $2.3 trillion in bonds in a further effort to stimulate growth. In statements after its last four policy meetings, it said it expected to keep rates ultra low until at least the middle of 2013.
But officials have chafed at a pledge that was tied to both the calendar and static. Fed Vice Chair Janet Yellen has indicated it no longer captured the U.S. central bank’s thinking.
In minutes from its December 13 meeting, released on Tuesday, the policy-setting Federal Open Market Committee said it will publish rate projections along with its regular quarterly economic forecasts after its next meeting on January 24-25.
It will also offer forecasts on the first rate hike.
“This step is arguably the greatest increase in transparency undertaken by the Bernanke Fed, and could represent his most lasting change to the way the FOMC conducts conventional interest rate policy,” said Michael Feroli, an economist at JPMorgan in New York.
Long-term interest rates, such as those on bonds and mortgages, encompass expectations for the short-term rates the Fed controls. By convincing financial markets it will keep rates on hold for longer than they already expect, the Fed could pull longer-term rates lower.
Michael Cloherty, head of U.S. interest rate strategy at RBC Capital Markets in New York, said he expected the new forecasts would show that the majority of Fed policymakers do not expect the next rate hike until 2014.
More…





David Duval’s Commentary:
Let me check my notes. Wasn’t it just a few weeks (days?) ago when everyone was talking down  commodities including gold?
What a difference a week (day?) makes!

Commodities Rebound Seen as Economy Skirts Slump
By Nicholas Larkin and Maria Kolesnikova – Jan 4, 2012 10:07 AM PT
Commodities may rebound from their first retreat in three years as developing economies shore up global growth, driving demand higher at a time when raw-material producers are already struggling to keep up.
Precious metals will advance 27 percent or more, industrial metals at least 17 percent and grains 5 percent, according to the median estimates in a Bloomberg survey of 143 analysts, traders and investors. Nine of the 15 commodities covered by a similar survey a year earlier reached their predicted highs in 2011, with another five no more than 4 percent away.
The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 16 percent through April, before tumbling 15 percent on mounting concern that Europe’s debt crisis and slower Chinese growth would curb demand for commodities. A 6.1 percent expansion in developing economies this year will help sustain global growth at 4 percent, above the average (IGDCWRLD) over the past decade, the International Monetary Fund predicts.
“The biggest thing driving commodities is the emerging world,” said James Paulsen, 53, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $330 billion of assets. “The emerging world slowdown bottoms out in the first half of the year and by the second half it’s accelerating again. You’ve also got the U.S. economy not just avoiding recession, but growing again.”
More…

Please consider making a small donation, to help cover some of the labor and cost for this blog.

Thank You

I'm PayPal Verified