John Taylor Warns Of A "Highly Disastrous, Totally Uncontrollable Inflationary Conflagration"

All this money sloshing around is nothing but kindling. This is enough to start one hell of a large inflationary fire, but probably not until we have a deflationary panic first – which will add even more kindling to the pile. The progression from the $1.5 billion Chrysler rescue to the current multi-trillion dollar worldwide financial support operations seems to parallel the march from the first US forestry service attempts to limit forest fires about a century ago to the far more sophisticated efforts possible today... Studies have shown that the onset of that catastrophe is almost totally unpredictable. By suppressing small fires, the forests approach an unstable state where the dead wood, resulting from the natural cycle of birth and death in the wild, is piled high, ready to explode into flames if the conditions are right. The central banks and other governmental authorities have piled the money so high that bubbles are popping up everywhere. With so many bubbles and so much kindling, volatility in price is a sure thing. As research has shown that the timing of these dramatic breakdowns, whether a forest fire, an earthquake, or a market crash cannot predicted, or mitigated as it runs its course, the time to control these crises is way before they start. The US Forestry Service knows that, please tell Bernanke! 

Greek Economy Suffers Record Collapse In February

There are those who recall that not ten days ago, according to the IMF's Greek (un)sustainability analysis, worst case scenario no less, Greek GDP would somehow miraculously post just a 1% drop in 2013. Unfortunately this won't happen. According to the overnight PMI update out of Europe (where was saw the jobless rate at the highest since 1997), the Greek economy just imploded at a record pace. This follows the already horrendous budget revenue data from January which came in down 7% on expectations of a 9% rise. Sure enough, as expected the fact that the entire country has taken the rest of 2012 off with no incentive to actually work, will do miracles for Greece. From Reuters: "The Markit Manufacturing Purchasing Managers' Index (PMI) for Greece fell to a survey low of 37.7 points in February from 41.0 in January, staying below the 50 mark that divides growth in activity from contraction for each of the past 30 months. Production and new order volumes fell at the sharpest pace in the near 13 year history of the survey as austerity sapped demand. New export orders fell for a sixth straight month and at the steepest rate since May 2010." Translated: the situation is hopeless and getting worse. Expect the German, pardon Troika, Kommissar to be shocked, shocked, to find out that not only do banks in Greece have no deposits left, but the entire economy picked up and left.

Gold and Silver Plunge – Called “Intervention”, “Window Dressing”, “Temporary Smash”, “Paper Fiasco”

The positive PMI data would ordinarily result in some price weakness as would the testimony from Bernanke which suggested that the Federal Reserve's ultra loose monetary policies may not continue much longer. However, the scale of the selling and size of the price falls was unusual. Respected analysts such as legendary Jim Sinclair, John Embry and Jean-Marie Eveillard suggested that the sell off was due to manipulation by bullion banks. Sinclair said it was an “intervention” and was “window dressing” that long term bullion investors should not be concerned about as inflation was coming due to “QE to Infinity.” Embry said that it was a “smash down” and a “paper fiasco.” Jean-Marie Eveillard suggested that central banks may have intervened, as they are doing in fx and bond markets, and sold gold in volume into the market. It is of course very difficult to ascertain what caused the sharp falls in the precious metals yesterday however it would be naive to completely discount what Sinclair, Embry and Eveillard believe may have happened.








Gold & Silver Smash Temporary, Oil to Super-Spike
http://kingworldnews.com
http://www.ft.com/intl/cms/s/0/11540ab8-62ec-11e1-9245-00144feabdc0.html

Fannie Asks Gov't for Almost $4.6B after 4Q Loss
http://finance.yahoo.com/news/fannie-asks-govt-almost-4-152028535.html
http://www.democracynow.org/2012/1/31/taxpayer_funded_freddie_mac_caught_betting

20 Economic Statistics To Use To Wake Sheeple Up From Their Entertainment-Induced Comas
http://theeconomiccollapseblog.com/archives/20-economic-statistics-to-use-to-...

Feds Release Official List Of Words Monitored On Social Networking Sites
http://blog.alexanderhiggins.com/2012/02/27/official-list-words-feds-monitore...
http://www.youtube.com/watch?v=5YPlmGDnOvE

Obama Issues 'Policy Directive' Exempting American Citizens From Indefinite Detention
http://www.infowars.com/obama-issues-policy-directive-exempting-american-citi...
http://big.assets.huffingtonpost.com/NDAAFactSheetFINAL.pdf

Romney Crowds vs Ron Paul Crowds
http://www.youtube.com/watch?v=fIP-ibpRYIY

Poor Man's Water Purifier
http://www.youtube.com/watch?v=bLwY2qgYqsw

How the Media Should Be Treated
http://www.youtube.com/watch?v=jMnZXPz4KXU

Greece Default SWAPS Don’t Have to Pay: ISDA

Eric De Groot at Eric De Groot - 8 minutes ago

Headline: Greece Default SWAPS Don’t Have to Pay: ISDA Default insurance on Greek debt won’t be paid out, the International Swaps & Derivatives Association said after it was asked to rule whether part of the nation’s $170 billion bailout was a credit event. The group said the European Central Bank’s exchange of Greek bonds for new securities exempt from losses being imposed on private... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 more »

 

 

ECB’s Latest Loans To European Banks Will Only Calm Markets Short-Term

Admin at Marc Faber Blog - 1 hour ago

Marc Faber said the European Central Bank’s latest loans to European banks will only calm markets short-term, lead to inflation in the long-term and push banks’ funding problems into the future, Handelsblatt said in a preview of a story that will run tomorrow, citing the fund manager. - *in Bloomberg* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* more »

 

 

Who Is The Best President For America?

Admin at Jim Rogers Blog - 1 hour ago

*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.* more »

 

 

Window Dressing Won't Change The View

Eric De Groot at Eric De Groot - 3 hours ago

Silver closed the 9/22 gap on a massive surge in volume (see chart 1). This surge in volume suggests that this resistance zone despite yesterday's resurgence of doubt and fear; major support and resistance zones tend to fail in threes. For example, trading heuristics such as three drives to a top and three taps and out describe this tendency. Silver must be watched closely. It's highly... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

Paper Ambushes Create Elevator Shaft Declines

Eric De Groot at Eric De Groot - 4 hours ago

As John Embry writes, "Central planners can’t announce they are going to have constant and massive QE or everything would go to the moon. So the idea is floated around that QE3 is off the table.” Orchestrated paper attacks on the price of gold and silver tend to be most effective during tentative A-and late C-waves advances. The sharply contracting negative lease spreads by mid February hinted... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

GM Channel Stuffing Soars To All Time High

Did channel stuffing expert AOL quietly merge with a Government Motors without anyone's knowledge? Because making record amounts of cars only to have them amortize rapidly in showrooms must be some New Normal definition of a recovery.

Goldman Closes Long Russell 2000 Trade On "Sagging Macro Data", "Softer Patch In US Data"

Busy day for our friends from Goldman who are now turning quite bearish it appears following the two GDP cuts earlier.

Goldman Lowers Q1 GDP For Second Time In One Day

Earlier we noted how Goldman cut their tracking forecast for Q1 GDP from 2.3% to 2.0% on weaker consumer spending data (which somehow resulted in a surge in consumer confidence: oh well, the US branch of the Chinese Department of Truth has to justify its budget somehow). Not even a full two hours later, the firm has just whacked its forecast for Q1 GDP again, this time on the major ISM miss. And this, ladies and gents, is ultra high frequency economics, where HFT machines push the market up and down without reason, and where this has an immediate impact on economic indicators, all changed around in real time.

ISM Misses Big

Somehow or another, our earlier joke that the ISM should beat the highest Wall Street estimate quickly became the whisper number, which was to be expected in the aftermath of yesterday's comparable Chicago PMI action. Which is why when the final ISM came at a whopping miss of 52.5, on consensus of 54.5, and down from 54.1, the market was less than happy. It gets worse: while the bulk of major ISM index components dropped in February, with PMI, New Orders, Production, Employment and Deliveries all down (Inventories unch), it was the scariest component that posted a major jump as Prices soared +6 to 61.5, the highest since June. And with Exports and Imports both improving, this proves that already in February rising gasoline prices started impairing US manufacturing. But don't tell that to the cheerleaders: because who was in the top spot of Wall Street "forecasters" if not Joe LaVorgna with his estimate of 56.0 for the ISM. Regardless, expect market sentiment to immediately shift to one that despite what Bernanke said less than 24 hours ago, this miss is an immediate green light for QE3 and the market should close at or near 14,000. Unless, of course, the vacuum tubes realize the minor detail that when David Tepper went "Balls to the Wall" and both bad news and good news meant stock upside, WTI was $85. It is $108 and rising now.

Market Share, Profitability, Why CDS Isn't On An Exchange

So, yesterday it was revealed that both Goldman and JPM had about 145 billion of “gross” notional outstanding on CDS related to the PIIGS. That means they each had roughly 145 billion of purchases and sales. They spoke about various netting agreements that makes the real number lower. They also mentioned with collateral and on a mark to market basis, the real exposure is far lower. Fine, though I wonder why they don’t execute the “master” netting and get the gross notionals down? Wouldn’t that help the system? If these were cleared or on an exchange, all they would have a single net exposure for each country. The collateral and netting would be handled at the central clearing or exchange. Wouldn’t that be simpler? Safer? The e-mini S&P future contract seems to be able to trade that way just fine, and it is more volatile than CDS on most days. Italian CDS is in 25 bps today – seems like a lot, but the up-front payment to buy or sell Italian CDS has changed by less than 1%.

Greek 1 Year Bond 80% Away From 1000%

Today for the first time ever Greek 10 year bonds slide to below 20% of par (5.9% of 2022 dropped to 19.145 cents) as expected some time ago, as increasingly the revulsion to post reorg bonds gets greater and greater courtesy of that now meaningless cash coupon of 2% through 2015. When considering that the country will redefault within a year, it explains why nobody has any interest in holding Greek paper even assuming there is an EFSF bill sweetener. Also, today's ISDA decision did not help. What is most amusing is that as of this morning, the country's 1 Year bonds hit an all time high yield of 920.2%. Well, if Greek bonds crossing 100% just 5 months ago was not quite attractive, perhaps 1000% will. At this rate we expect said threshold to cross some time today.

Personal Income, Spending Come In Weaker Ahead Of Gasoline Price Shock

And some more bad news for the economy, as the driver of 70% of US GDP, the US consumer, continues to retrench. Today's personal spending and income data showed several things: that in January Personal Incomes did not keep pace with the rate of growth, rising 0.3% compared to 0.5% in December, and less than the 0.5% expected. Spending also missed expectations of a 0.4% rise, instead picking up just 0.2%, from 0.0% in December. More importantly, we once again see that living in a socialist state has its drawbacks when the spigot is shut off: among the biggest drivers for the weak data was a change in government handouts: "Personal current transfer receipts decreased $3.6 billion in January, in contrast to an increase of $13.8 billion in December.  Within personal current transfer receipts, “other” government social benefits to persons decreased $14.9 billion in January, in contrast to an increase of $1.5 billion in December.  The January change in “other” government social benefits to persons reflected a decrease of $13.6 billion due to the expiration of the Making Work Pay refundable tax credits." Luckily what the government takes with one hand it offsets with the other: "Government social benefits for Medicaid decreased $7.8 billion in January, in contrast to an increase of $0.2 billion in December.  Government social benefits for social security increased $20.3 billion in January, compared to an increase of $9.6 billion in December. The January change reflected 3.6-percent cost-of-living adjustments (COLAs) to social security benefits and to several other federal transfer payment programs.  Together, these COLAs added $30.2 billion to the January increase in government social benefits to persons."  Well at least somebody still does COLA in this day and age of ubiquitous 'deflation.'

Jobless Claims Unchanged At 351K, Fall Vs Upward Revised Number

A rather uneventful initial claims report which came in line with the election year expectations, beating consensus of +355K modestly, at 351K, which is where it was last week, except for the traditional 100% of the time, upward revision to last week's data, which was pushed higher from 351K to 353K, and in turn which will force algos to read the news as a decline in claims. Today's number gets some additional scrutiny as it comes in the NFP survey week. Continuing claims same deal: the number came a little better than expectations of 3418K at 3402K, was a deterioration compared to the unrevised last week number of 3392K but an improvement to the revised # which was 3404K. On the other hand, people at the trailing end of the cliff declined, as those on EUCs and Extended benefits dropped by 16K in the week ended February 11. As a result, people collecting extended benefits are now 1.13 million less than a year ago, and no longer collect direct BLS benefits. As for disability that's a different matter. Finally, none of this impacts America's young workers, who as noted yesterday, have an employment rate of 54%.

Today's Busy Event Roster: ISM, Lack Of Personal Income, Job Losses, Construction Outlays, and GM Channel Stuffing

Very busy day today with personal lack of savings, an ISM number which will likely beat consensus so much it will be above the highest Wall Street estimate, construction lack of outlays, Ben Bernanke speech day two, GM channel stuffing, and many Fed speakers.




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

Thank You

I'm PayPal Verified