Is This The Chart That Has The Bernank So Worried?
Earlier we described why it is clear that the Fed will need to print exponentially to fill the void of the crunch in consolidated credit money but why does The Bernanke remain so hedged and guarded in his optimism
when the market is tearing bears' arms-and-legs off and every talking
head from here to Tokyo is claiming we have reached the nirvana of
self-sustaining recovery (with, we note one such reconstituted deal-makerIt's the data stupid. Simply put, as the chart below shows, the strength of trend of key US data over the past three months has been disappointing in aggregate (of course one can cherry pick BLS prints or sub-indices of ISM) and the worrying
similarities between 2011 (when the same overshoot of optimism
occurred) is only too real a problem for The Bernank and his buddies if
they take away the Kool-Aid too early once again and let us drink our
own stale sugar-free water. So the next time you hear some long-only
asset manager or octogenarian wealth adviser say the 'data has been very
strong' so buy-and-hold big-tech or dividend-payers, do them a favor
and remind them of this chart and what happened last year. claiming "we don't need the Fed's help anyway" after the FOMC meeting). Here Is Why The Fed Will Have To Do At Least Another $3.6 Trillion In Quantitative Easing
As we have repeatedly said in the past, the quarterly Flow of Funds (or Z.1) statement is most interesting not for the already public household net worth and leverage data which serves to make pretty charts and largely irrelevant articles,
but due to its insight into the stock and flow of both the traditional
financial system but far more importantly - into shadow banking. And
this is where things get hairy. Because while equities may have returned
to 2008 valuations, the credit shortfall across combined US
liabilities - traditional and shadow - still has a $3.6 trillion hole to plug to get to the level from March 2008
(see first chart). It is this hole that is giving equities, which have
already surpassed 2008 levels, nightmares. Because while the Fed is
pumping traditional commercial banks balance sheets via reserve
expansion (read: fungible money that manifests itself most directly in
$5 gas at the pump) resulting in a $2.3 trillion rise in traditional
liabilities from Q3 2008 through Q4 2011, what it is not accounting for
is the now 15 consecutive quarters of shadow banking system
contraction, which peaked at $21 trillion in Q1 2008, and in Q4 2011
declined to $15.1 trillion... and dropping. It is this differential
that will be the source of the needed "Outside" money, discussed yesterday,
and that is only to get equity valuations to a fair level! But
considering the Fed's propensity to print at any downtick, this is very
much a given, much to the horror of Dick Fisher. Any additional increase in stock prices will require not only the already priced in $3.6 trillion, but far more direct Outside money injections.BTFD...(Buy The F...ing Dip)
from Silver Doctors:
From SD Reader FW:
So long as the PM fundamentals remain bullish, the wise hedger and professional investor is one that buys these dips. The charts might scare the crap out of you, but that’s just the way of our world. The PM sector is not like most markets. The charts are “painted” by the management actions of powerful actors with every incentive in the world to support the global, leveraged inverted pyramid fiat system (including fear of outright system crash and French Revolution scenarios; the end game period is here and the powers that be are going “all in” because they have few, if any, alternative options).
I agree with Doc’s analysis in full with one small exception. At this stage of the game, we do indeed have organic weak hand selling that comes in after the table has been set. Thus, today’s action isn’t strictly an artifact of Cartel direct action. There are indeed many traders scrambling for liquidity, and many traders are also placing bets on an incorrect (in the intermediate-term and long-run) view about a deflationary spiral in Europe creating consistent downward pressure on precious metals, in part, because these traders do not see these metals as representing true no counter-party risk money. They view the US dollar as the only “safe” form of money to hold during deflation. Heck, even gold as money is debated and questioned by the majority of the people that make up the individuals controlling short and medium-term money flows in the financial system. That worldview is the extreme “bubble” view, which has taken hold in the last forty years in the West.
Read More @ SilverDoctors.com
So long as the PM fundamentals remain bullish, the wise hedger and professional investor is one that buys these dips. The charts might scare the crap out of you, but that’s just the way of our world. The PM sector is not like most markets. The charts are “painted” by the management actions of powerful actors with every incentive in the world to support the global, leveraged inverted pyramid fiat system (including fear of outright system crash and French Revolution scenarios; the end game period is here and the powers that be are going “all in” because they have few, if any, alternative options).
I agree with Doc’s analysis in full with one small exception. At this stage of the game, we do indeed have organic weak hand selling that comes in after the table has been set. Thus, today’s action isn’t strictly an artifact of Cartel direct action. There are indeed many traders scrambling for liquidity, and many traders are also placing bets on an incorrect (in the intermediate-term and long-run) view about a deflationary spiral in Europe creating consistent downward pressure on precious metals, in part, because these traders do not see these metals as representing true no counter-party risk money. They view the US dollar as the only “safe” form of money to hold during deflation. Heck, even gold as money is debated and questioned by the majority of the people that make up the individuals controlling short and medium-term money flows in the financial system. That worldview is the extreme “bubble” view, which has taken hold in the last forty years in the West.
Read More @ SilverDoctors.com
With
many investors worried about the plunge in gold and silver, today King
World News interviewed James Turk out of Spain. He told King World News
this smash in the metals is very similar to what took place at the end
of February. Turk firmly believes this is more proof of intervention
and manipulation in these critical markets. Here is what Turk had to
say about the turmoil in both metals: “What happened, after the FOMC
meeting, in the last two days is a replay of what happened at the end of
February. Gold got up to $1,800 (at the end of February), (then it
was) smashed. (Two days ago) gold got up to $1,700 and it was smashed
(again).”James Turk continues: Read More @ KingWorldNews.com
from King World News:
With
gold and silver plunging, today King World News interviewed legendary
Jim Sinclair’s chartist Dan Norcini. Norcini told KWN that sell-stops
and fresh speculative shorting are putting short-term pressure on both
gold and silver. Here is what Norcini had to say: “Eric, the reason
gold is getting hit so hard and by consequence silver as well, has to do
specifically with the action in the bond market. To start the year, I
told KWN readers and listeners the most important market in 2012 was
going to be the bond market. The bonds have had a massive breakdown.”
Dan Norcini continues: Read More @ KingWorldNews.com
With
gold and silver plunging, today King World News interviewed legendary
Jim Sinclair’s chartist Dan Norcini. Norcini told KWN that sell-stops
and fresh speculative shorting are putting short-term pressure on both
gold and silver. Here is what Norcini had to say: “Eric, the reason
gold is getting hit so hard and by consequence silver as well, has to do
specifically with the action in the bond market. To start the year, I
told KWN readers and listeners the most important market in 2012 was
going to be the bond market. The bonds have had a massive breakdown.”Dan Norcini continues: Read More @ KingWorldNews.com
Get ready for a golden summer.Precious metals have been selling off lately. Gold is down 10% from its peak last August, including a violent $100 drop last Tuesday. Silver is down almost 30% since its peak last April. It dropped 6% in just one day last week.
But if gold and silver sell off hard today – perhaps in response to the Federal Open Market Committee announcement this afternoon – get ready to buy. A big drop today will set up a bullish chart pattern, which could lead to sharply higher prices by the summer.
Let me explain…
Read More @ GrowthStockWire.com
Bob Chapman joins us today for our biweekly precious metals check-in. Gold is down to around $1650, and there is mountainous trouble in Europe. Bob says what we’re seeing is just a diversion to distract you from what’s happening over in Europe. The US is blatantly in the market, and according to Bob manipulating it. The central banks of many countries like India and China are buying gold at anything under $1700. Bob has traded for 25 years as a professional, and he says BUY!
Click Here to Listen to the Podcast
from The Economic Collapse Blog:
Would
America be a better place without Goldman Sachs? Of course it would.
The “vampire squid” of Wall Street does not care about the future of
America. Sadly, Goldman Sachs apparently does not even care much about
their own clients. What Goldman Sachs is all about is making as much
money as humanly possible. In the end, there is nothing wrong with
making money, but there are constructive ways to make money and there
are destructive ways to make money. Unfortunately, Goldman Sachs seems
to find the destructive path almost irresistible. Greg Smith, the head
of the U.S. equity derivatives business for Goldman Sachs in Europe, the
Middle East and Africa made headlines all over the world on Wednesday
when he resigned publicly from Goldman Sachs in a scorching editorial in the New York Times.
Smith said that he could “honestly say that the environment now is as
toxic and destructive as I have ever seen it”. Considering what we know
has gone on at Goldman over the past decade, that is very frightening
to hear. So could this be the beginning of the end for Goldman Sachs?
And if it is, will America be a better place when Goldman is gone?
Read More @ TheEconomicCollapseBlog.com
Would
America be a better place without Goldman Sachs? Of course it would.
The “vampire squid” of Wall Street does not care about the future of
America. Sadly, Goldman Sachs apparently does not even care much about
their own clients. What Goldman Sachs is all about is making as much
money as humanly possible. In the end, there is nothing wrong with
making money, but there are constructive ways to make money and there
are destructive ways to make money. Unfortunately, Goldman Sachs seems
to find the destructive path almost irresistible. Greg Smith, the head
of the U.S. equity derivatives business for Goldman Sachs in Europe, the
Middle East and Africa made headlines all over the world on Wednesday
when he resigned publicly from Goldman Sachs in a scorching editorial in the New York Times.
Smith said that he could “honestly say that the environment now is as
toxic and destructive as I have ever seen it”. Considering what we know
has gone on at Goldman over the past decade, that is very frightening
to hear. So could this be the beginning of the end for Goldman Sachs?
And if it is, will America be a better place when Goldman is gone?Read More @ TheEconomicCollapseBlog.com
by Andrew P. Napolitano, LewRockwell.com:
The
First Amendment to the Constitution prohibits the government from
infringing upon the freedom of speech, the freedom of association and
the freedom to petition the government for a redress of grievances.
Speech is language and other forms of expression; and association and
petition connote physical presence in reasonable proximity to those of
like mind and to government officials, so as to make your opinions known
to them.
The Declaration of Independence recognizes all three freedoms as stemming from our humanity. So, what happens if you can speak freely, but the government officials at whom your speech is aimed refuse to hear you? And what happens if your right to associate and to petition the government is confined to areas where those of like mind and the government are not present? This is coming to a street corner near you.
Read More @ LewRockwell.com
The
First Amendment to the Constitution prohibits the government from
infringing upon the freedom of speech, the freedom of association and
the freedom to petition the government for a redress of grievances.
Speech is language and other forms of expression; and association and
petition connote physical presence in reasonable proximity to those of
like mind and to government officials, so as to make your opinions known
to them.The Declaration of Independence recognizes all three freedoms as stemming from our humanity. So, what happens if you can speak freely, but the government officials at whom your speech is aimed refuse to hear you? And what happens if your right to associate and to petition the government is confined to areas where those of like mind and the government are not present? This is coming to a street corner near you.
Read More @ LewRockwell.com
by Dr. Paul Craig Roberts, PaulCraigRoberts.org:
One
of the great economic myths is that markets are rational. Not a day
passes without this myth being disproved scores of times, but the myth
persists.
For example, today (March 14) Bank of America/Merrill Lynch reported that “yesterday US markets started the day off with a strong rally after the solid retail sales report. . . . tailwinds are helping boost global equity markets today.”
The “solid retail sales report” for February consists of a 1% nominal gain. That is, the increase is not deflated by the month’s inflation rate, which will be released on March 16. In other words, if very much of the 1% nominal gain in retail sales is due to higher prices, the inflation adjusted gain will not be statistically significant. The “rational market” took off without waiting to find out whether the gain was real.
Moreover, as statistician John Williams has established, the official Consumer Price Index (CPI) understates inflation. If an honest measure of inflation was used, retail sales could be in negative territory.
Read More @ PaulCraigRoberts.org
One
of the great economic myths is that markets are rational. Not a day
passes without this myth being disproved scores of times, but the myth
persists.For example, today (March 14) Bank of America/Merrill Lynch reported that “yesterday US markets started the day off with a strong rally after the solid retail sales report. . . . tailwinds are helping boost global equity markets today.”
The “solid retail sales report” for February consists of a 1% nominal gain. That is, the increase is not deflated by the month’s inflation rate, which will be released on March 16. In other words, if very much of the 1% nominal gain in retail sales is due to higher prices, the inflation adjusted gain will not be statistically significant. The “rational market” took off without waiting to find out whether the gain was real.
Moreover, as statistician John Williams has established, the official Consumer Price Index (CPI) understates inflation. If an honest measure of inflation was used, retail sales could be in negative territory.
Read More @ PaulCraigRoberts.org
by Nomi Prins:
Today,
I have received dozens of media requests and hundreds of emails
regarding former Goldman Sachs executive, Greg Smith’s gutsy, and
internationally resonating, public resignation.
I
applaud Smith’s decision to bring the nature of Goldman’s profit-making
strategies to the forefront of the global population’s discourse, as so
many others have been doing through books, investigative journalism, and
the Occupy movements over the past decade since my book, Other People’s Money,
was written after I resigned from Goldman. It would be great if Smith’s
illuminations would serve as the turning point around which serious
examination and re-regulation of the banking system framework would
transpire.
Read More @ NomiPrins.com
by Mike Cotugno, EndTheLie.com:
Economic, political and social strife are ramping up at an exponential rate around the world as global production and development atrophies, promising a further proliferation of civil decay.
Wars rage on as the ministry of truth propaganda machine whips up the Prozac-addicted populace into a xenophobic, jingoist frenzy to send more and more of their young men and women to fight and die for vague and specious ends.
We are denied due process of law while the most vile wretches in society claim power over other men through the usurpation of the state’s monopoly on law and force, over which they have profound sway and influence.
Millions are losing their homes and jobs and depend on food stamps for sustenance while the already opulent and affluent pigs on Wall Street are somehow becoming more corpulent and voracious.
Read More @ EndTheLie.com
Economic, political and social strife are ramping up at an exponential rate around the world as global production and development atrophies, promising a further proliferation of civil decay.
Wars rage on as the ministry of truth propaganda machine whips up the Prozac-addicted populace into a xenophobic, jingoist frenzy to send more and more of their young men and women to fight and die for vague and specious ends.
We are denied due process of law while the most vile wretches in society claim power over other men through the usurpation of the state’s monopoly on law and force, over which they have profound sway and influence.
Millions are losing their homes and jobs and depend on food stamps for sustenance while the already opulent and affluent pigs on Wall Street are somehow becoming more corpulent and voracious.
Read More @ EndTheLie.com
by Jeffrey Tucker, Whiskey and Gun Powder:
Most
of us hadn’t thought about Davy Jones of the Monkees in many years.
Suddenly, he died at the age of 66 and we were all instantly living in
his world. Tributes were everywhere. His YouTube videos were slammed
with hits. Praise for his life and works appeared on blogs everywhere.
People were honoring his memory by looking back at the timeline of his life, seeing the change in his face and appearance from the youngest age when he played the Artful Dodger to his last year, in which he was still singing (and actually, he looked great!).
The same now happens when every major culture figure passes on. We see a lifetime of pictures. We see the change, the aging process, the gradual graying, the weight gain, the other intriguing responses of our physical appearance to the passage of time.
Read More @ WhiskeyAndGunPowder.com
Most
of us hadn’t thought about Davy Jones of the Monkees in many years.
Suddenly, he died at the age of 66 and we were all instantly living in
his world. Tributes were everywhere. His YouTube videos were slammed
with hits. Praise for his life and works appeared on blogs everywhere.People were honoring his memory by looking back at the timeline of his life, seeing the change in his face and appearance from the youngest age when he played the Artful Dodger to his last year, in which he was still singing (and actually, he looked great!).
The same now happens when every major culture figure passes on. We see a lifetime of pictures. We see the change, the aging process, the gradual graying, the weight gain, the other intriguing responses of our physical appearance to the passage of time.
Read More @ WhiskeyAndGunPowder.com
by Andy Hoffman, MilesFranklin.com:
Many erroneously view gains in absolute terms, forgetting one’s financial standing is more relevant in relative terms to “competing” investors. For example, even when gold fell 30% in late 2008 (entirely due to the Cartel, I might add), it dramatically outperformed stocks, real estate, and ALL commodities. Not that investors strive for “less losses” – as opposed to “more gains” – but markets cannot be controlled, particularly when government intervention is a key systemic factor.
PM investors have been put through sheer agony over the past decade, with many destroyed by the Cartel and others – like myself –scarred but better for the experience. However, gold and silver prices have risen more than any asset class over this period, doing so while others – residential real estate, for example – actually declined. Thus, PM holders were rewarded for their mettle with the double jackpot of superior absolute and relative returns.
Read More @ MilesFranklin.com
Many erroneously view gains in absolute terms, forgetting one’s financial standing is more relevant in relative terms to “competing” investors. For example, even when gold fell 30% in late 2008 (entirely due to the Cartel, I might add), it dramatically outperformed stocks, real estate, and ALL commodities. Not that investors strive for “less losses” – as opposed to “more gains” – but markets cannot be controlled, particularly when government intervention is a key systemic factor.
PM investors have been put through sheer agony over the past decade, with many destroyed by the Cartel and others – like myself –scarred but better for the experience. However, gold and silver prices have risen more than any asset class over this period, doing so while others – residential real estate, for example – actually declined. Thus, PM holders were rewarded for their mettle with the double jackpot of superior absolute and relative returns.
Read More @ MilesFranklin.com
Biderman’s Daily Edge 3/14/2012: Government Wrong on Jobs and Wages Again
from End of The American Dream:
Democrat
Party headquarters in Lake County, Florida has been flying an American
flag with a face of Barack Obama on it. Yes, you read that correctly.
The “Obama flag” features a huge picture of the face of Barack Obama in
the area where the stars are usually located. To many Americans today,
the American flag may be “just a piece of cloth”, but when I was young I
was taught that one must never desecrate the American flag. The
American flag is our highest national symbol. Millions of Americans
have fought and died defending freedom and liberty under that banner.
To see a photo of Barack Obama plastered on it is an absolute disgrace.
Sadly, there are lots of these flags floating around. In fact, you can
buy them online for $12.95. Down in Florida, the chairwoman of the
Lake County Democratic Party took down the “Obama flag” after a group of
veterans protested, but she also said that she is not promising that
she will not put it back up and that she is going to consult an attorney
about all of this.
Read More @ EndOfTheAmericanDream.com
Democrat
Party headquarters in Lake County, Florida has been flying an American
flag with a face of Barack Obama on it. Yes, you read that correctly.
The “Obama flag” features a huge picture of the face of Barack Obama in
the area where the stars are usually located. To many Americans today,
the American flag may be “just a piece of cloth”, but when I was young I
was taught that one must never desecrate the American flag. The
American flag is our highest national symbol. Millions of Americans
have fought and died defending freedom and liberty under that banner.
To see a photo of Barack Obama plastered on it is an absolute disgrace.
Sadly, there are lots of these flags floating around. In fact, you can
buy them online for $12.95. Down in Florida, the chairwoman of the
Lake County Democratic Party took down the “Obama flag” after a group of
veterans protested, but she also said that she is not promising that
she will not put it back up and that she is going to consult an attorney
about all of this.Read More @ EndOfTheAmericanDream.com
from GoldSilver.com:
The Federal Reserve Bank released stress tests 2 days early, prompted by New York branch class A shareholder/director Jamie Dimon, who also happens to be the CEO of government-backstopped megabank, JP Morgan (JPM).
Dimon announced an equity buy back plan for JP Morgan and a dividend hike, timed to counter the negative sentiment in financial equities that followed the mild Fed statement which implied a bit of a wait for further printing. Waiting longer to exchange toxic assets for fresh cash will test institutions facing loan losses and declining net interest margin due to interest price fixing to a near-zero integer by the Fed. Dimon wanted to jump the gun and give JPM an advantage prior to the test results.
The strategy worked, The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007. Sensing the opportunity to time the release of the stress test results with the change in sentiment offered by Dimon, the Fed took action.
Read More @ GoldSilver.com
The Federal Reserve Bank released stress tests 2 days early, prompted by New York branch class A shareholder/director Jamie Dimon, who also happens to be the CEO of government-backstopped megabank, JP Morgan (JPM).
Dimon announced an equity buy back plan for JP Morgan and a dividend hike, timed to counter the negative sentiment in financial equities that followed the mild Fed statement which implied a bit of a wait for further printing. Waiting longer to exchange toxic assets for fresh cash will test institutions facing loan losses and declining net interest margin due to interest price fixing to a near-zero integer by the Fed. Dimon wanted to jump the gun and give JPM an advantage prior to the test results.
The strategy worked, The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007. Sensing the opportunity to time the release of the stress test results with the change in sentiment offered by Dimon, the Fed took action.
Read More @ GoldSilver.com
Is Syria Near The Tipping Point?
The
encroachment of yet another troubled nation into global geopolitical
(read US implicitly) strife, this time Syria, appears to be
intensifying further. As Sabah notes today, the CIA Director David Petraeus paid a surprise visit to Turkish Prime Minister Tayyip Erdogan yesterday.
The topics of discussion were 'regional issues' but it was evident
from concerns voiced about the instability in Syria and Iraq giving the
PKK (Kurdistan Workers' Party) terrorist organization a stronger foothold (a group which has been a source of tension between USA, Syria, Iraq, and obviously Turkey before - whose 'undeclared war' with Syria was a direct response to the countries assistance to the PKK). Seemingly stuck in the middle, Erdogan warned of "the potential crisis that could develop in the region due to the sectarian strife in Iraq" and underlined his concerns of events in Syria. One can only wonder at the strategic positioning that the CIA Director's surprise visit
achieved, since the published agenda seemed so calmly diplomatic, and
for what reason the ninety minute visit was so spontaneous.Elijah Cummings Is First Political Muppet To Issue Goldman Op-Ed Response
It was literally a matter of hours following the release of the now historic Greg Smith "Muppets" Op-Ed, before the true criminals enabling the slow motion trainwreck of the Keynesian klepto-fascist experiment became heard. Sure enough, here is Elijah Cumming indicating he has the most to gain by scapegoating a firm that between Vampire Squids and Muppets is slowly being mocked into the same relevancy as an HR Giger petting zoo.Please consider making a small donation, to help cover some of the labor and costs to run this blog.
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