European Weakness Spreads And Accelerates
European equity prices fell for the third day in a row and pulled back near six week lows, breaking below the 50DMA for the first time since it crossed above on 1/16. Today's drop was the largest in three weeks as Italian banks were halted, plunging their most in over three months and back at levels not seen since mid January. Most Italian banks are down 9-11% in March but BMPS is down over 24% as Italian sovereign yields start to come unhinged again (ironically a day after Monti announced the crisis was over). 10Y BTPs broke back below last Friday's lows (the moment the ECB stepped in last time to save the day) up over 5.2% yield - catching up to CDS levels (and ITA spreads are +23bps on the week). Spain is also weak (+15bps on the week) and heading for 3 month highs in its yields. Since the CDS roll (March 20th), the sell-off has accelerated with equity and credit markets tracking lower together (as opposed to the last few months where credit underperforms and then snaps back higher). We discussed the LTRO Stigma trade earlier and that has continued sliding notably wider today as LTRO-encumbered banks hugely underperform. We suspect hedges (sovereign credit, financial credit, and equity) placed early in the year for the 3/20 Greece event (among other things) have run off and now managers are reducing risk in real terms (selling) as opposed to replacing hedges which is why the uber-supported markets of Italy and Spain are losing the battle now. Lastly, Europe's VIX is its richest relative to US VIX since the rally began, jumping dramatically today.
CTRL+SPIN: The Bernanke Concludes The Fed Propaganda Tour
Today
at 12:45pm will be the 4th and final lecture given by the CTRL+P
spinmaster himself to young and easily impressionable GW students. The
propaganda tour will conclude as Ben shares his views on the "The
Aftermath of the Crisis" where we will most certainly learn that the
primary consequence is a parabolically rising global balance sheet,
where $7 trillion in excess liquidity has been dumped in the world in
the past 5 years by the big 5 central banks. That and the fact that
virtually all energy commodities are trading at or near all time
records. We will likely also learn that while it is speculators' fault
that gas is at an all time high for this time of year, it is not
speculators fault that the S&P is at a 4 year high. In fact, we will
learn a whole lotta stuff that those who took the red pill some time
ago, may have forgotten. Watch it live below. Paul Mylchreest Presents Various Visual Case Studies Of Gold Price Manipulation
When it comes to open questions and general issues surrounding the gold market, The Thunderroad Report's Paul Mylchreest is among the leading contrarian voices who always injects a dose of reality in an otherwise nebulous topic, and one which has been a great disappointment for central bankers over the past century, because as Chris Martenson explained yesterday, "Gold is an objective measure of the degree to which fiat money is being managed well or managed poorly" and never has fiat money been managed as badly as over the past 4 years. In his latest report, Mylchreest focuses on a topic that is near and dear to many precious metal fans: manipulation, and specifically capturing it in practice. In an extended overview of what he dubs various "repeating algorithmic trading programmes" Mylchreest is confident he has enough evidence to demonstrate a recurring pattern of blatant gold manipulation. And he very well may: at the end of the day price merely express the relative confidence of buyers versus sellers, but at the end of the day, we once again go back to the one question we keep on repeating, and one which Martenson also picked up on: if gold is manipulated, so what? Not only so what, but thank you! Because what keeping the price artificially lower does is provides a cheap entry point to pick up physical. As a reminder, those who buy gold, at least so they claim, are not doing it to flip it higher in some fiat equivalent, unless they are merely speculators of course, and instead preparing for the period that follows the collapse of paper money, in which only sound currency, such as gold and silver, will be relevant. In this context, we can only say - bring on the manipulation, in fact send gold to zero if possible please. Frankly neither we, nor anyone else, should be that much concerned with day to day gyration of the value of gold. The long-term trajectory is well-known, however the only question is- does one buy gold to sell it (in dollars, euros, rial, or dong), or to have a true backstop to a failing currency when point T+1 finally comes?Follow Your Own Passion
All you need to do is to figure out your own passion and follow your
passion. That`s how you are going to be successful in life. -* 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.*
Gold Is Not A Bubble
No, gold is not in a bubble. It wasn’t in a bubble in 1973, either, but it
still corrected by 40% then. I don’t believe gold is anywhere near a bubble
phase. A bubble phase is characterized by the majority of market
participants being involved in a market space. I saw a gold bubble in
1979–1980, when the whole world was dealing—buying and selling gold
24-hours a day, globally. - *in Business Insider*
*Related, SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX),
Goldcorp (GG)*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market a... more »
Economy grew 3% in 4Q 2011, jobless claims still falling
The growing gap between consumption and investment represents not only structural deficits but also the importance of consumption to maintain economic growth in the United States. In other words, consumption drives today's growth while investment, the driver of tomorrow's growth, languishes near all time lows. Infinite liquidity might lift all boats, but it won’t do much to close this... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
"The Apple Conundrum": Why One Fund Is Not Buying The iKool-Aid
Looking
at the parabolic rise in AAPL shares in the past 3 months one would
imagine that the company's product line up, so well telegraphed over
the past several years, has changed, or at least has found a way to
cure cancer, while expanding margins, and also providing loans to
cash-strapped US consumers to buy its products exclusively. Truth is
nothing substantial has changed - we have merely seen a ramp as every
hedge fund and asset manager jumps on the Apple bandwagon (we fully
expect at least 250 funds to hold Apple as of March 31: at least 216 were in the stock as of December 31 and then even Dan Loeb jumped in after)
which is fun and games on the way up, but pain and tears when the
bubble finally does pop. Many have attempted to warn the public about
the latest manic phase of Apple expansion, but few have succeeded - such
as the the reality of bubbles: they pop when you least expect them.
Yet giving it the old college try, here is Obermeyer Asset Management's
John Goltermann with an extended commonsensical approach to his
perspective on the company with two main growth products, and why unlike
everyone else, he is not buying the iKool-Aid.1987 Redux Or Sweet Serenity
The last time the S&P 500 rallied in such a serene manner as the current trend was March 1987
- a few months before monetary imbalances came undone and crashed in
October 1987. Further, JPMorgan's Michael Cembalest notes that prior to
WWII, the previous rally as calm and uninterrupted as this was in
November 1928 - a year before the crash. The JPM CIO points out how the Fed's ZIRP has created a 'Portfolio Rebalancing Channel' (PRC) transmission mechanism
from cheap credit to wealth effect through spending and profits (that
has worked as planned) but the last leg on this mechanism has not
functioned so well. Payroll growth has been underwhelming and the
housing market remains stunted - leaving the real economy remaining
fragile despite the market's appearance. The Fed remains committed to
driving this 'channel' but, as Cembalest points out this could easily
be derailed by inflation, a bond market revolt towards funding our 'Ecuadorean' deficits, or the pending fiscal cliff
legislated for 2013. "So the PRC keeps chugging along, until the Fed's
job is done (and Goldilocks continues), or something breaks."
History does not rhyme; ninety years ago, money-printing led to
calamity in Germany, and eventually, to disaster in Europe. Today,
money-printing is designed to save it.Our sponsors were chosen to help you prepare for the coming global financial collapse...If you wait until TSHTF (the shi! hits the fan) it will be too late...
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From Kindergarten Kash To Student Loan Krash - Uncle Sam Now Paying For Toddlers
We
have discussed numerous times the surge in Student Loans as the
lifeblood of the consumer credit expansion that we seem to be having but
now its just getting ridiculous. Smart Money reports
on the growing use of student loans for the private K-12 education
needs of affluent families. This is not affordable loans for
impoverished savants to get their PhD at 14 years old, roughly
20% of families that applied for aid to pay for their children's
kindergarten through 12th grade private school education had incomes of
$150,000 or more, up from just 6% in 2002-3. 'Pre-college'
loans are becoming more popular as the story notes "It used to be that
families first signed up for education loans when their child enrolled
in college, but a growing number of parents are seeking tuition
assistance as soon as kindergarten." These loans, which do not have to
be repaid until the child graduates college are expensive (varying
between 4 and 20% and average $14,000) which would be on top of the
nearly $34,000 average that 1 in 6 parents already carry for college
graduates - leaves parents at risk of owing considerably larger sums of
debt. Still, perhaps the e*Trade baby will put that cash to good use
but one parent sums up the alternate reality that exists within so many
US households with regard to debt: "We'll figure out how to pay for it then, or with any luck they'll get scholarships," he says. "Right or wrong, we're hoping our experiment works." Keep buying those Mega Millions tickets too...Charting Premature Jubilation - The US Economic Growth Momentum Is Now Over
It is funny to hear the talking heads preface virtually every bullish statement with "the US economic data is getting better." It's funny because it's wrong. We have been tracking economic data based on our universe of indicators and as of today we have seen a miss rate of about 80%. And now, Deutsche Bank has joined us in keeping track of economic beats and misses, with their own universe of 31 economic indicators. The results are shown below and the verdict is in: the US economy has officially turned the corner... lower, now that the seasonally adjusted boost from a record warm winter fades and becomes an actual drag (not to mention the fading of the $2 trillion in central bank liquidity).
by Mac Slavo, SHTF Plan:
The hacking group known as Anonymous intends to attack the core servers that control the routing of all internet traffic. DNS, or Domain Name Servers, are a critical backbone of the web and make it possible for internet surfers to reach web site destinations by typing in a domain name in their browsers. Once a particular web site is requested, a query is sent to a domain name server, which then redirects that web address to a specific IP address on the web. Without these servers, access to web sites through traditional means (typing in a ‘dot com’) becomes impossible, because there is no way to direct the traffic to the appropriate web site destination.
According to a statement released by Anonymous, it is these servers that will come under fire on Saturday, March 31.
Anonymous says they do not intend to ‘kill’ the internet completely, but rather, the end game of Operation Blackout 2012 is a temporary take down of the internet where “it hurts most.” According to the group, the operation is being carried out to:
…protest SOPA, Wallstreet, our irresponsible leaders and the beloved bankers who are starving the world for their own selfish needs out of sheer sadistic fun, on March 31, anonymous will shut the Internet down. (source)
Read More @ SHTFPlan.com
The Hera Research Newsletter is pleased to present a fascinating interview with Martin A. Armstrong, founder and former Head of Princeton Economics, Ltd. In the 1980s, Princeton Economics became the leading multinational corporate advisor with offices in Paris, London, Tokyo, Hong Kong and Sydney and in 1983 Armstrong was named by the Wall Street Journal as the highest paid advisor in the world.
As a top currency analyst and frequent contributor to academic journals, Armstrong’s views on financial markets remain in high demand. Armstrong was requested by the Presidential Task Force (Brady Commission) investigating the 1987 U.S. stock market crash and, in 1997, Armstrong was invited to advise the People’s Bank of China during the Asian Currency Crisis.
Read More @ FinancialSense.com
from Silver Doctors:
In a preview excerpt of The Doc’s interview with silver analyst David Morgan of Silver-Investor.com, David discusses in detail the supply and demand side of silver, his outlook for the next 6-12 months.
When asked about silver’s current supply and demand fundamentals, David replied:
Industrial demand for silver has been increasing rather significantly over the last decade or so. If you go back a decade or so the total demand on the industrial side was about 38% of the market, and if you look at more recent studies, it’s grown to about 54% of the market. During that 10 year time-frame the silver production from mining has gone up significantly, and that’s primarily been driven by the commodities boom overall, and that’s primarily been driven by China. That means that the demand side on industrial uses has increased.
As far as the investment demand goes, on the supply side, it’s increased from the year 2000 to present. Investment demand has been steadily increasing over time. If you look at the supply/demand from 1990 to 2006 we were in a structural deficit. That was about 100 million ounces a year for 15 years, so roughly 1.5 billion ounces of silver were depleted from 1990 to 2006.
Read More @ SilverDoctors.com
In a preview excerpt of The Doc’s interview with silver analyst David Morgan of Silver-Investor.com, David discusses in detail the supply and demand side of silver, his outlook for the next 6-12 months.
When asked about silver’s current supply and demand fundamentals, David replied:
Industrial demand for silver has been increasing rather significantly over the last decade or so. If you go back a decade or so the total demand on the industrial side was about 38% of the market, and if you look at more recent studies, it’s grown to about 54% of the market. During that 10 year time-frame the silver production from mining has gone up significantly, and that’s primarily been driven by the commodities boom overall, and that’s primarily been driven by China. That means that the demand side on industrial uses has increased.
As far as the investment demand goes, on the supply side, it’s increased from the year 2000 to present. Investment demand has been steadily increasing over time. If you look at the supply/demand from 1990 to 2006 we were in a structural deficit. That was about 100 million ounces a year for 15 years, so roughly 1.5 billion ounces of silver were depleted from 1990 to 2006.
Read More @ SilverDoctors.com
by Forrest Jones, Money News:
The Federal Reserve will hint that it favors rolling out more extraordinarily loose monetary policy tools such as quantitative easing, the third such round since the downturn (known widely as QE3) at its next meeting, says Bill Gross, founder of Pimco, the world’s largest bond fund.
While individual Federal Reserve governors have come out publicly for or against quantitative easing, which are asset purchases from banks designed to kick-start the economy when normal measures like rate cuts aren’t enough, the Fed officially remains mute on the matter.
That will change at the Fed’s April policy meeting, Gross says on his Twitter account, stating the Fed is “likely to hint” at QE3 in April meeting.
Read More @ MoneyNews.com:
The Federal Reserve will hint that it favors rolling out more extraordinarily loose monetary policy tools such as quantitative easing, the third such round since the downturn (known widely as QE3) at its next meeting, says Bill Gross, founder of Pimco, the world’s largest bond fund.
While individual Federal Reserve governors have come out publicly for or against quantitative easing, which are asset purchases from banks designed to kick-start the economy when normal measures like rate cuts aren’t enough, the Fed officially remains mute on the matter.
That will change at the Fed’s April policy meeting, Gross says on his Twitter account, stating the Fed is “likely to hint” at QE3 in April meeting.
Read More @ MoneyNews.com:
by Meg Kinnard, The State :
South Carolina residents would be able to use gold and silver coins as currency under a bill advanced Tuesday by a House panel.
The measure approved by the House Judiciary Committee would let people use the precious metals as money as long as businesses agree to take them. Legislators had made the argument that they didn’t want to force businesses to take the metals and have to figure out the worth of the coins from one day to the next and amended the bill to remove such a requirement.
Advocates of the measure say the metal coins are more stable than the dollar, although Rep. Greg Delleney, who chaired the subcommittee that studied the bill, has previously warned that, if the dollar collapses, people will be in trouble no matter what the metals are worth.
Read More @ TheState.com:
South Carolina residents would be able to use gold and silver coins as currency under a bill advanced Tuesday by a House panel.
The measure approved by the House Judiciary Committee would let people use the precious metals as money as long as businesses agree to take them. Legislators had made the argument that they didn’t want to force businesses to take the metals and have to figure out the worth of the coins from one day to the next and amended the bill to remove such a requirement.
Advocates of the measure say the metal coins are more stable than the dollar, although Rep. Greg Delleney, who chaired the subcommittee that studied the bill, has previously warned that, if the dollar collapses, people will be in trouble no matter what the metals are worth.
Read More @ TheState.com:
[Ed. Note: The IRS is looking forward to destroying a lot of lives if Obamacare isn't shot down by the Supreme Court.]
by Paul Bedard, The Examiner:
The Internal Revenue Service wants to add about 4,000 agents to hunt down tax cheats and still plans to spend $303 million building a system to oversee Obamacare even though its future looks bleak in the U.S. Supreme Court.
A new Government Accountability Office review of the IRS 2012 tax return season and the taxman’s fiscal 2013 budget request also found that the agency’s customer service rating has slipped and 5.5 million returns were delayed a week because of a computer programming glitch.
Read More @ examiner.com
by Paul Bedard, The Examiner:
The Internal Revenue Service wants to add about 4,000 agents to hunt down tax cheats and still plans to spend $303 million building a system to oversee Obamacare even though its future looks bleak in the U.S. Supreme Court.
A new Government Accountability Office review of the IRS 2012 tax return season and the taxman’s fiscal 2013 budget request also found that the agency’s customer service rating has slipped and 5.5 million returns were delayed a week because of a computer programming glitch.
Read More @ examiner.com
[Ed. Note: um... so there is NO fix to this fiat debt black hole nightmare? Thought so.]
by Gabi Thesing and Jeff Black, Bloomberg Business Week:
European Central Bank Governing Council member Jens Weidmann said boosting Europe’s rescue funds will not solve its debt crisis, days before finance ministers meet to discuss expanding the limit on bailout lending.
“Just like the ‘Tower of Babel,’ the ‘Wall of Money’ will never reach heaven,” Weidmann said in a speech at Chatham House in London today. “If we continue to make it higher and higher, we will, in fact, run into more worldly constraints,” which might include setting “incentives that lead to new problems in the future.”
Euro-area finance ministers are likely to bolster Europe’s crisis funds to between 700 billion euros ($934 billion) and 940 billion euros at a meeting in Copenhagen on March 30. German Chancellor Angela Merkel this week gave her first indication that she is prepared to allow an increase in the firewall as Portugal and Spain show “fragility.”
“All the money we put on the table will not buy us a lasting solution to the crisis,” Weidmann said, citing Bank of England Governor Mervyn King’s view on the matter that it merely buys time.
Read More @ BusinessWeek.com
by Gabi Thesing and Jeff Black, Bloomberg Business Week:
European Central Bank Governing Council member Jens Weidmann said boosting Europe’s rescue funds will not solve its debt crisis, days before finance ministers meet to discuss expanding the limit on bailout lending.
“Just like the ‘Tower of Babel,’ the ‘Wall of Money’ will never reach heaven,” Weidmann said in a speech at Chatham House in London today. “If we continue to make it higher and higher, we will, in fact, run into more worldly constraints,” which might include setting “incentives that lead to new problems in the future.”
Euro-area finance ministers are likely to bolster Europe’s crisis funds to between 700 billion euros ($934 billion) and 940 billion euros at a meeting in Copenhagen on March 30. German Chancellor Angela Merkel this week gave her first indication that she is prepared to allow an increase in the firewall as Portugal and Spain show “fragility.”
“All the money we put on the table will not buy us a lasting solution to the crisis,” Weidmann said, citing Bank of England Governor Mervyn King’s view on the matter that it merely buys time.
Read More @ BusinessWeek.com
by Doug French, Lew Rockwell.com:
The U.S. government has created borders within the country’s borders at every airport in the country. Technologies abound in ticketing and check-in on one side of the border while commerce thrives on the other. In between is a massive government apparatus requiring that shoes be kicked off, laptops be unpacked, and less than 3.1 ounces of liquid be carried in any one container. The only technology in sight is the offensive porno scanners. And for those that refuse scanning, a brutish pat-down is administered.
These Transportation Security Agency (TSA) borders are guarded by 58,401 bureaucrats in blue, at a cost this year of $8.1 billion. The taxpayers must not spare any expense in convincing themselves that the government is making us safe.
Read More @ LewRockwell.com
The U.S. government has created borders within the country’s borders at every airport in the country. Technologies abound in ticketing and check-in on one side of the border while commerce thrives on the other. In between is a massive government apparatus requiring that shoes be kicked off, laptops be unpacked, and less than 3.1 ounces of liquid be carried in any one container. The only technology in sight is the offensive porno scanners. And for those that refuse scanning, a brutish pat-down is administered.
These Transportation Security Agency (TSA) borders are guarded by 58,401 bureaucrats in blue, at a cost this year of $8.1 billion. The taxpayers must not spare any expense in convincing themselves that the government is making us safe.
Read More @ LewRockwell.com
Central Banks Won’t Produce Natural Interest
from The Daily Bell:
The Bank of England should raise interest rates next week … Most people that read finance columns have heard of the “natural rate of unemployment”, and many will know that the term was introduced by Milton Friedman. But far fewer will know where he got the term. He said himself, in his Nobel Prize lecture, that “The “natural rate of unemployment” [is] a term I introduced to parallel Knut Wicksell’s “natural rate of interest”". But who was Knut Wicksell and what is the “natural rate of interest” – and does it matter? We shall see that it does indeed matter, and tells us something important about current UK monetary policy and the outlook for the UK economy and George Osborne’s chances of delivering his fiscal plans …Three years, now, at 0.5 percent, and counting. That compares with a natural rate of interest that was about 5 percent when times were better and will be around 3-3.5 percent now. (Essentially, add the 2.5 per cent RPI inflation rate that’s about the target to the 1 percent or so sustainable growth rate, and you get a decent guess at the natural rate.) Having interest rates so far below the natural rate damages the sustainable growth rate of the economy. – UK Telegraph/ Andrew Lilico
Dominant Social Theme: We just have to figure out what’s natural and then fake it.
Free-Market Analysis: Here comes Andrew Lilico, an economist with Europe Economics, and a member of the Shadow Monetary Policy Committee, according to the UK Telegraph (see article above).
Read More @ TheDailyBell.com
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The Bank of England should raise interest rates next week … Most people that read finance columns have heard of the “natural rate of unemployment”, and many will know that the term was introduced by Milton Friedman. But far fewer will know where he got the term. He said himself, in his Nobel Prize lecture, that “The “natural rate of unemployment” [is] a term I introduced to parallel Knut Wicksell’s “natural rate of interest”". But who was Knut Wicksell and what is the “natural rate of interest” – and does it matter? We shall see that it does indeed matter, and tells us something important about current UK monetary policy and the outlook for the UK economy and George Osborne’s chances of delivering his fiscal plans …Three years, now, at 0.5 percent, and counting. That compares with a natural rate of interest that was about 5 percent when times were better and will be around 3-3.5 percent now. (Essentially, add the 2.5 per cent RPI inflation rate that’s about the target to the 1 percent or so sustainable growth rate, and you get a decent guess at the natural rate.) Having interest rates so far below the natural rate damages the sustainable growth rate of the economy. – UK Telegraph/ Andrew Lilico
Dominant Social Theme: We just have to figure out what’s natural and then fake it.
Free-Market Analysis: Here comes Andrew Lilico, an economist with Europe Economics, and a member of the Shadow Monetary Policy Committee, according to the UK Telegraph (see article above).
Read More @ TheDailyBell.com
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