How The Bernank Will Cause the Next CRASH Before 2014: Rich Will Lose 50% in Massive Wealth Destruction

“Massive wealth destruction coming,” warns Hong Kong economist Marc Faber, one of many “Dr. Dooms” we’ve featured over the years.
by Paul B. Farrell , Market Watch:
Faber warned in a recent interview on CNBC: The Super-Rich “may lose up to 50 percent of their total wealth.”
How? “Somewhere down the line we will have a massive wealth destruction. That usually happens either through very high inflation or through social unrest or through war or credit-market collapse.” And as if to punctuate his message, in Barron’s recent “Midyear Roundup,” Faber was asked, “Will things get worse before they get better?”
Answer: “Yes, possibly much worse,” adding “most markets peaked in May 2011.” He expects “further weakness in the second half of the year. Corporate profits will disappoint … stock markets are oversold. The U.S. government-bond market is overbought. The U.S. dollar is overbought, and gold is oversold near term.” Worse, he’s “very negative about the outlook longer term.”
Read More @ MarketWatch.com.com

Santelli On 'The Smoking Gun'

In a follow-up to Liesman's earlier rebuttal, CNBC's Rick Santelli just reiterated his earlier sentiment that the comments that Mr. Bernanke made earlier were indeed the "Libor Smoking Gun". While Bernanke tried to eschew the matter by claiming the low-level Fed employee was clueless (which from the transcript she was seemingly clued in enough to understand the rate was not 'accurate'). As Rick notes in Bernanke's own words: "the manipulation of rates was a little bit low by certain banks but they just wanted to show they were healthy during the crisis" - unbelievable! "What are regulators for?", Santelli exclaims: "manipulation is manipulation!" Indeed, Rick, indeed.

Is Liesman The Ultimate Cognitive 'Dissonant'?"

Quickly following up on Rick Santelli's epic rant (which CNBC decided not to publish) on the 'smoking gun' reality of Bernanke's testimony this morning: that they knew that rates were being manipulated but it was for the good of the people - and asking rhetorically, we assume, "Why Do We Have Regulators? Manipulation Is Manipulation!"; Steve Liesman has been brought out to relay the party line to the citizenry - that there is no smoking gun. Furthermore, Liesman sees a 1-2bps compression in Treasury yields as signalling the market's belief that NEW QE is indeed still on and the drop in stocks is merely a lack of instant gratification. It seems to us that Santelli's perspective that Bernanke knows he is at his limit with regard to efficacy of measures seems much more realistic than Liesman's re-iteration of the Fed-Watcher's desires and his own incredible cognitive dissonance - just what happens if the Fed is not omnipotent?

Investors' Attitude: "What? Me Worry? Why?"

Trader Dan at Trader Dan's Market Views - 1 hour ago

Given all that is transpiring across our global economic and financial system, the degree of utter complacency in the US equity markets is astonishing. Looking at the Complacency Index, my name for the Volatility Index or the VIX, one would think that there is hardly a care in the world. All of this has a somewhat surreal feeling to me. It is almost as if the entire investing community is in a state of denial. It seems to believe that the "all powerful demi-gods" aka, the Central Bankers and monetary officials, are able to suspend the impact of excessive leveraging and exorbitant in... more » 

 

Dont Expect Fed Hints/Action Until Money Has Been Positioned

Eric De Groot at Eric De Groot - 1 hour ago

Did anyone other than the feel-good media think Bernanke would hint about easing today? Maybe it’s just me. I expect a lot of hedging statements, prefaced by plenty of maybes, possibly, and the phrase “when conditions warrant it.” His testimony, what little I have heard it, focused on glimmers of hope. He cited improving housing trends to justify inaction. Bernanke, contrary to popular... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

CNBC Video: Reaction To China`s GDP

Admin at Marc Faber Blog - 5 hours ago

Latest video interview on CNBC. *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Peugeot, Its Record High Default Probability, And A Brief Primer On Corporate Viability Under Socialism

With central bankers dominating the airwaves, and the only thing that matters is who prints where and how much, most can be forgiven to have missed one of the more important micro developments in the past few weeks: namely the case study of emblematic French automaker Peugeot, which just happens to be Europe's second largest, and its Credit Default Swaps, which have doubled in the past  4 months, to a record high spread of 813 bps, which means the probability of default for the company has nearly doubled from 29% to 52% in a few short months. Yet what is it about Peugeot that is interesting - well the fact that the biggest spike in its default risk has taken place in the last few days, which have seen a nearly 100 basis point spike. The catalyst: "French President Francois Hollande, elected in May after pledging to block a “parade of firings,” said July 14 he would lean on Peugeot to rework the plan intended to stem losses and trim production capacity. The government will report the findings of a review later this month, as well as measures to prop up the French auto sector." The problem is that this type of state intervention into corporate viability and profitability is precisely what precipitates wholesale bankruptcy. And this is precisely what the bond market has reacted to. Because while Hollande is doing all he can to pander to populism, and to recreate America's epic failure involving GM, the reality is that by enforcing what he thinks is "right" and "fair" dooms not only Peugeot and its 200,000 employees, but millions of upstream and downstream workers.

The Incredible Lightness Of Buy-Side Volume

Today's market movement was/is remarkable in its clarity. One glance at this chart and it will become brutally clear that once 1340 was hit, the 'tickle-algo' was triggered and a de minimus volume press on the bid-offer stack limped us all the way back to the day's highs - considerably above VWAP. Whether we see the institutional selling blocks hit now is still undecided but if there was ever any doubt about who is selling and who is buying this chart should clarify...

How White Collar Crime Became The "Business Model" Of Corporate/State America

There are a number of cultural and governmental impediments to prosecuting WCCs. One of which is the corrupting influence of money to neuter regulations and to co-opt politically appointed regulators and prosecutors. Another is perception. Wealth in our country is equated with royalty or a high station in society, so people have a hard time seeing the white collar criminal as the deviant that he is. People have a hard time wanting to punish someone who looks nice, has nice clothes, drives a nice car, lives in a good neighborhood, went to a prestigious school, belongs to exclusive clubs, etc. vs. someone who does not have those things. If you're poor in this country, that's almost a crime in and of itself to some people. Conversely, rich people have all sorts of credibility, whether its deserved or not. Why should I listen to an actor about a topic that's not related to acting? Sure, he may have some interesting things to say, but he shouldn't be given automatic credibility on the subject and yet many people do just that. Romney became rich bankrupting companies and selling their assets and yet people look to him to "run our economy"? What politician can ever say that they can run an economy? The Soviets tried to do just that and look what happened to them.
Another reason WCCs may not be prosecuted is that individuals, organizations, governments, and even society at large may be vested in the criminal activity either wittingly or unwittingly.

The Elephant In The Room Continues Sitting On The VIX, Sends It To 2 Month Lows

As S&P 500 e-mini futures (ES) slumped this morning as Bernanke appeared to disappoint (and the rest of the risk-on asset classes all tumbled with it), we saw heavy volume and relatively large average trade size. Once the edge of glory from Friday at 1340 was hit, it seemed the magic Potter-esque fairy was back at play. Immediately, VIX was hammered from 17.5% to 16.1% - its lowest in almost 3 months as the bottomless pit of capital that feels comfortable selling vol (or perhaps using a levered approach to ramping stocks) drive ES back up an impressive 14 points on low volume and low average trade size. Yes, we crossed VWAP, yes we crossed unch, and now we are testing highs back above the 50DMA. It seems VIX once again is the ramping tool - and now is significantly dislocated from any equity or credit sense of reality. We presume that OPEX will clean up some of this exuberance but for now, it is the tail wagging everything's dog.

Sicily Is San Bernardino: With First Italian Region On Verge Of Default, Montius Pilate Washes His Hands

Buried deep in the newsflow from Ben Bernanke is the following piece of very critical news for anyone who is still long Italian bonds: namely that Italy may not be Spain, or Uganda, but Sicily is about to become San Bernardino. From Reuters:  "Italian Prime Minister Mario Monti said on Tuesday he expected the governor of Sicily to resign following a growing financial crisis that has pushed the autonomous region close to default." Because the resignation of Sicily Governor Lombardo will somehow allow all those who care about the fundamentals of Italy to stick their heads in the sand... at least until Sicily is followed by Calabria, Campania, Lazio, Abruzzo, Tuscany, Lombardy, Umbria, Liguria, Veneto and so on. At least the governors of those respective provinces now have an advance warning what the endgame is.

Chuck Schumer To CTRL-P "Get To Work Mr. Chairman"... For The Benefit Of My Donors

Yes, Chuck Schumer just said "Get to work, Mr. Chairman" right after saying that "The Fed is the only game in town... You have to take whatever actions are necessary to ensure a strong recovery." What he really meant is that my biggest donors demand a solid bonus for 2012. Who are these donors you may ask? Here they are.

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RNC Rules Confirm Ron Paul Will Be Up For Nomination In Tampa

from Matlarson10:

Gold, the global economy and Mongolia’s huge mineral potential

by Brian Sylvester, MineWeb.com

NY Hedge Fund manager James Passin* gives his views on gold, the global economy and the enormous mineral potential of Mongolia, the world’s fastest growing economy. Gold Report interview.

The Gold Report: James, the Bank of England (BOE), the European Central Bank (ECB) and the People’s Bank of China have made moves to boost flagging economies. The BOE added £50 million to its quantitative easing program. The ECB reduced its key lending rate to a record low of 0.75%. China cut its key lending rate for the second time in a month to prevent a further slump in manufacturing and a fall in property values. What effect will these moves have on the gold price through year-end?
James Passin: It’s clear that loosening monetary conditions will stimulate commodity prices generally and will eventually support the beginning of a great inflationary wave. In the short term, it’s impossible to call, as strong deflationary pressures are emanating out of weak economic conditions and deleveraging. Gold, while far less popular than in recent years, is still a widely held asset of hedge funds. The consequence is that it’s harder for gold to have any kind of sustainable short-term reaction to changes in monetary conditions.
TGR: Gold is trading around $1,600/ounce (oz) right now. Will it hold?
Read More @ MineWeb.com

Glaxo whistleblower goes public with shocking details of bribery, marketing fraud and other pharma crimes

by Mike Adams, Natural News:
GlaxoSmithKline employee and whistleblower Blair Hamrick has helped make medical history. Together with his colleague Gregory Thorpe, Blair blew the whistle on criminal practices taking place inside GlaxoSmithKline which have now led to the largest criminal admission and financial settlement in the history of western medicine. GSK is paying a $3 billion fine while pleading guilty to felony crimes. (http://www.naturalnews.com/036416_GlaxoSmithKline_fraud_criminal_char…).
Blair recently joined Mike Adams on the Health Ranger Report for a video interview. In this astonishing interview, Blair describes his firsthand knowledge of the “bribery” of physicians, the push for off-label marketing of drugs for unapproved health conditions, the illegal marketing of drugs to children, how 80 percent of physicians were willing to be “on the take,” and other astonishing details from behind the scenes of the criminally-operated medical mafia known as Big Pharma.
Read More @ NaturalNews.com

Reality Check: Would Romney’s Economic Plan Really Send 800,000 Jobs Overseas?

from BenSwannRealityCheck:

Ben Swann Reality Check takes a look at a new claim by President Obama that Mitt Romney’s economic plan will send 800,000 jobs overseas

The Bernank’s Speech

The Bernank says the economy has slowed significantly due to the eurozone debt crisis and uncertainty over US fiscal policy and the bank is ready to offer more stimulus. Here is his speech in full.
from The Telegraph:
The Economic Outlook
The US economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year. After rising at an annual rate of 2.5pc in the second half of 2011, real gross domestic product (GDP) increased at a 2pc pace in the first quarter of 2012, and available indicators point to a still-smaller gain in the second quarter.
Conditions in the labor market improved during the latter part of 2011 and early this year, with the unemployment rate falling about a percentage point over that period. However, after running at nearly 200,000 per month during the fourth and first quarters, the average increase in payroll employment shrank to 75,000 per month during the second quarter. Issues related to seasonal adjustment and the unusually warm weather this past winter can account for a part, but only a part, of this loss of momentum in job creation. At the same time, the jobless rate has recently leveled out at just over 8pc.
Household spending has continued to advance, but recent data indicate a somewhat slower rate of growth in the second quarter. Although declines in energy prices are now providing some support to consumers’ purchasing power, households remain concerned about their employment and income prospects and their overall level of confidence remains relatively low.
Read More @ Telegraph.co.uk

Civil War Declared in Syria, Globalist’s Formula for WW III Begins

by Susanne Posel, Occupy Corporatism:
The Syrian opposition is doing a fine job as directed by the CIA . The connection between these “rebels” and the US government is uncanny. Mainstream media has downplayed the Western intervention into the Syrian conflict, referring to them as “pro-democracy campaigners” without admitting their political agendas or ties.
The same champions of former President G.W. Bush’s invasion of Iraq are cheering on the sidelines, waiting for Obama’s unconstitutional declaration of war in Syria.
Read More @ OccupyCorporatism.com

Inflation is a Monetary Phenomenon

by Ron Paul, The Daily Bell:
Later this month Congress will have an unprecedented opportunity to force the Federal Reserve to provide meaningful transparency to lawmakers and taxpayers. HR 459, my bill known as “Audit the Fed,” is scheduled for a vote before the full Congress in July. More than 270 of my colleagues cosponsored the bill, and it has the support of congressional leadership. But its passage in the House of Representatives is only the beginning of the battle, as many Senators and the President still don’t see the critical need to have a national discussion about monetary policy.
The American public now senses that the Fed’s actions, especially since 2008, are enormously inflationary and will cause great harm to the American economy in the long run. They are beginning to understand what so many economists still don’t understand, which is that inflation is a monetary phenomenon, and rising prices are merely a symptom of that phenomenon. Prices eventually rise when the supply of US dollars (paper or electronic) grows faster than the available goods and services being chased by those dollars.
Read More @ TheDailyBell.com

GDP – Not What it is Meant to Be

from Wealth Cycles:
What is GDP? It is supposed to be a measurement of the economic output of a nation. GDP is “gross domestic product” and is the totality of what is created locally within the borders of the country in question. The trouble comes in the way it is calculated:
GDP = private consumption + investment + government spending + (exports − imports)

• Private Consumption
• Investment
• Government Spending
• (Exports – Imports): We want to ignore imports, as they are not domestically produced, and add in things produced domestically and then exported.

Even the inventor of GDP was not keen on the measure. First developed by Simon Kuznets for a U.S. Congress report in 1934, he immediately said not to use it as a measure for welfare of the nation. Later he elaborated, saying that “distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run.”
Read More @ WealthCycles.com

HSBC ‘acted as financier to drug gangs’ – US Senate report

[Ed. Note: As we have noted at SGTreport time and time again, HSBC, the custodian for the GLD ETF has a long, documented history of being a criminal enterprise.]
from The Telegraph:
A “pervasively polluted” culture at HSBC allowed the bank to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria, according to a scathing US Senate report.
While the big British bank’s problems have been known for nearly a decade, the Senate probe detailed just how sweeping the problems have been, both at the bank and at the Office of the Comptroller of the Currency, a top US bank regulator which the report said failed to properly monitor HSBC.
“The culture at HSBC was pervasively polluted for a long time,” said Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations, a Congressional watchdog panel.
The report comes at a troubling time for a banking industry reeling from a multi-country probe into the manipulation of global benchmark rates. Last month, rival British bank Barclays agreed to pay a £290m fine to settle a US-British probe into the rigging of the benchmark interest rate known as the London interbank offered rate, or Libor.
Read More @ Telegraph.co.uk

The Positive Shift for Mining in Europe

by Alena Mikhan and Jeff Clark, Casey Research:

Europe has a long mining history and to this day still possesses a sizable chunk of the world’s natural resources. Over the past few decades, however, EU countries have mostly imported their resources. This was easier, cheaper, and avoided most environmental conflicts. But now the trend seems to be reversing, due in no small part to the dragging economy and the real benefits of jobs and tax revenue that mining brings.
Overall interest in mining and exploration is increasing in Europe, as evidenced in Brussels, the continent’s political center. A “Raw Materials Strategy” was initiated in 2008 and then revised and updated in 2010 and early 2011. Among other purposes, the initiative seeks to encourage sustainable supplies of raw materials from within the EU and calls for policies in support of domestic mining. In September 2011, the European Parliament adopted the “EU Raw Materials Strategy,” a generally pro-mining document, though it’s sometimes criticized by the industry for being “too bureaucratic.” Quelle surprise!
Read More @ CaseyResearch.com

IRS has no legal basis to collect Affordable Care Act tax – It’s all an act!

by Ethan A. Huff, Natural News:
Many Americans right now are reeling in disgust over the Supreme Court’s recent decision to uphold the constitutionality of the Affordable Care Act. But according to a recent report by My Way News, the Internal Revenue Service (IRS), which will allegedly be tasked with enforcing the new health insurance mandate in the form of a “tax” for non-compliance, does not actually have the authority or legal standing to collect penalties from individuals who choose to “opt-out” of the mandate.
As many NaturalNews readers already know, most Americans will be required under the Affordable Care Act to purchase health insurance, as well as show proof, beginning in 2014, that they purchased health insurance in accordance with the mandate. Those who decide not to purchase health insurance will be charged a penalty, also known as a “tax” according to Chief Justice John Roberts (http://www.naturalnews.com), which is to be collected by the IRS.
Read More @ NaturalNews.com

The Naked Shorts Will Be Destroyed In The Gold Market

from KingWorldNews:
Today Stephen Leeb told King World News that the gold market now boils down to a “war between establishment and the non-establishment.” Leeb, who is Chairman of Leeb Capital Management, also said, “When the banks finally get scared that they are short too much gold, you will see a major explosion in price.”
The acclaimed money manager also stated, “The banks continue to charge the customers for holding their gold as ‘allocated,’ even though the gold has gone out the door to aid in the gold price suppression scheme. This is fraud, plain and simple, but this fraud is being encouraged by the establishment.”
Here is what Leeb had to say about the war in gold, who the players are, and how it will end: “I’ve been reading through your past interviews, Eric, and it’s becoming more and more apparent to me that the gold market is really at the center of what is the major divide in this world, and that’s the establishment vs non-establishment.”
Stephen Leeb continues @ KingWorldNews.com

How the US Feds Feed the Rich

By Bill Bonner, Daily Reckoning.com.au:

The Daily Reckoning…proved right again!
We’ve been sticking our neck out. We had a strong hunch that the rich had gotten a whole lot richer not because they were suddenly greedier or suddenly smarter, but because of the feds. The feds were handing out money. The rich were first in line.
But we didn’t have any real proof…until now.
Relatively speaking, the rich have gotten a lot richer over the last 30 years. The whiners and fixers want to do something about it. They say the rich weren’t taxed heavily enough…and they weren’t regulated enough.
That had little to do with it, we pointed out. Instead, the meddlers themselves caused the rich to get richer.
Who’s right? We are, of course…

A report from the Federal Reserve Bank of New York suggests that the bulk of equity returns for more than a decade are due to actions by the US central bank. Theoretically, the S&P 500 would be more than 50 percent lower — at the 600 level — if the bullish price action preceding Fed announcements was excluded, the study showed.
Read More @ DailyReckoning.com.au

Bypassing News: US citizens journalism killing mainstream

from RussiaToday:

Bias and bungled reporting on US news networks are behind plummeting audience numbers, according to the Gallup Poll. RT’s Marina Portnaya looks at a cutting-edge project that’s encouraging ordinary Americans to drive their country’s news agenda instead.

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