BTFD...Keep Stacking...
While
the highly "sophisticated" traders that make up the gold market
continue to buy or sell the precious metal based on whether the Fed will
or will not do the NEW QE tomorrow (or just because, like Bruno Iskil,
they have a massive balance sheet, and can create margin position out
of thin air with impunity), China continues to do one thing. Buy.
Because while earlier today we were wondering (rhetorically, of
course) what China is doing with all that excess trade surplus if it is
not recycling it back into Treasurys, now we once again find out that
instead of purchasing US paper, Beijing continues to buy non-US gold,
in the form of 68 tons in imports from Hong Kong in the month of June.
The year to date total (6 months)? 383 tons. In other
words, in half a year China, whose official total tally is still a
massively underrepresented 1054 tons, has imported more gold than the
official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and
so on, and whose YTD imports alone make it the 14th largest holder of
gold in the world. Realistically, by now China, which hasn't provided
an honest gold reserve holdings update to the IMF in years, most
certainly has more gold than the IMF, and its 2814
tons, itself. Of course, the moment the PBOC does announce its official
updated gold stash, a gold price in the mid-$1000 range will be a long
gone memory.
Maybe this is a naive question, but as Goldman clients get skinned again and again and again and again and again by Goldman’s failed calls — while Goldman itself continues to rack up prop trading profits
— I keep wondering just why anyone would take investment advice from a
trading firm? And beyond that, why is it even legal for trading firms to
advise clients? Isn’t this the biggest conflict of interest possible?
We know firms including Goldman have advised clients to buy junk that
the trading arm wants to get off its books.
I'm PayPal Verified
Yes, we all know that Europe is in deep, deep, trouble, and we all know that Europe has a major fiscal deficit issue which is why well over half of the Eurozone is effectively locked out of the capital markets, and only has funding courtesy of various back door Ponzi schemes funded by the ECB, and we also all know that on a consolidated basis Europe's debt/GDP is very high. But the truth is that at least Europe is taking small steps to rectify its historic profligacy and is at least pretending to be implementing austerity (in some cases actually truly doing so). How about the US. Well, the chart below should answer that particular question. Because while the consolidated GDP of the US and Europe are nearly identical, they differ very materially in terms of both fiscal deficit, and total Debt/GDP. The chart below shows precisely where the differences lie between the United States of Europe and the United States of America.
There are already three former European central bankers who criticize more or less openly the European Central Bank (ECB).
All these older central bankers experienced the inflationary periods
in the 1970s in detail, whereas the younger ones seem not to grasp what
inflation means. Modern central bankers seem to think that monetary inflation will not lead to price inflation in the long-term.
This might be true in countries where asset prices need to de-leverage
after the bust of real-estate bubbles. But it is certainly not true in
states like Germany, Finland or Switzerland, that did not have a
real-estate bubble till 2008. With current low employment and the aging
population, qualified personnel who speaks the local language will get
rare. PIMCO’s Bill Gross might be right saying that soon employees want to get a part of the cake and not only the stock holders. This essentially implies wage inflation, the enemy of the 1970s.
Today was the lowest volume in S&P 500 e-mini futures (for a non-holiday trading day) in, well, bloody years
(and NYSE volume was as dire as Monday's). Today's ES range, under 9
points, was the lowest in the last eight days of low ranges and in fact
the eight-day range has only been this low a few times in the last few years and all but one of those marked a significant top.
The S&P wavered around unch for most of the day with a US
day-session-open ramp, post weak-data that signaled bad-is-good buying
in Gold and stocks. Treasuries kept on leaking higher in yield, now up
12-16bps on the week as the USD meandered around unch on the week - with
EUR weakness pulling it also back to unch on the week. VIX limped
lower by 0.25 vols to 14.6 (after touching unch) but we do note that VVIX (the implied vol of VIX) has been diverging higher in the last two days but it's getting kinda crazy when we are looking at compound options for any signal. HY credit underperformed once again - with a quite ugly flush into the close (on heavy volume).
It
was not enough that the Fed's Richard Fisher was 'allowed' on CNBC
this afternoon to expropriate himself and his merry-Fed-men from his
'fanatical' colleague nemesis Rosengren; but Maria B., for one glorious moment, asked a question so sensible it was stunning: "Is The Fed Bailing Out The White House?" The notably business-man-background Fisher was wonderfully heretical in explaining that additional
stimulus would have little impact, that the Fed's action would indeed
'look political', and that "US lawmakers need to get their fiscal act
together." While he doesn't see a high likelihood of a recession
in 2013, he comprehends clearly the wait-and-see 'defensive crouch'
that businesses are in given the huge uncertainty. On a slow day, with
so much print-and-it's-all-fixed hope, the clarifying vision of at
least one man on the FOMC is perhaps worth holding onto.
From
HFT to LIBOR manipulation and European bond legal-covenants, and now
Auto-manufacturer channel-stuffing; all conspiracy 'theories' proved
conspiracy 'facts' - as Gabby Douglas might say "Nailed It!" We have been vociferously pointing out the incredible levels of channel-stuffing occurring at GM in the US, then China, and most recently into Europe (must read here) and now the WSJ confirms the latter; as sales
of BMW and Mercedes, helped by heavy discounts and contingencies to
dealers, are being questioned. Kenn Sparks, a BMW spokesman, said its July sales total includes vehicles that were purchased by its dealers for use as what are known as "demos"—
cars used on lots for test drives. He declined to say how many
reported sales were demos, saying BMW doesn't release the figure.
"These vehicles may stay on the lot because they are used as demo
models," he said. BMW's incentives appeared to help propel the car
maker to a 1,900-vehicle lead over Mercedes-Benz (as stunningly ridiculously surprisingly 7-Series sales tripled MoM, and 3-Series doubled).
Traditional
legal principles are seemingly pretty clear and straightforward on how a
good faith acquisition of stolen goods is to be treated: the
buyer, even though he is not criminally liable, can not acquire title to
stolen property. The failed futures brokerage Sentinel Management Group
lost the money of its clients in when it went into bankruptcy in 2007.
According to the SEC, the firm misappropriated the funds belonging to
its clients. Since then, creditors of the company have been fighting
over who has title to certain assets. On the one side are the customers
of Sentinel, whose funds and accounts were supposed to have been
segregated from the company's assets. On the other side there is New
York Mellon Bank, which lent Sentinel $312 million that were secured
with collateral mainly consisting of said – allegedly 'segregated' –
customer funds. The result: 'Banks that received what were
essentially misappropriated goods as collateral do not have to return
them to their original owners as long as they are deemed to have acted
in good faith'. Legal questions aside, one thing is already
certain: customers of futures brokerages can no longer have faith that
their assets are in any way segregated or protected. This is yet another
chink in the 'confidence armor' that has propped up the financial system to date.
With
the Fed lowering interest rates and flattening the curve in an effort
to squeeze any- and every-one into risk-assets and mal-investment; the
sad truth of this action is that it forces a drastic unintended
consequence on the growing population of people that actually care
about the future. Critically, as Citi points out, lower yields require much higher rates of saving (both corporates and households)
and while 10% of salary allocated to 'retirement savings' will meet its
goals with a 4% return hurdle, at current low yields, the average-joe in the street will need to 'save' 25% of his income - cutting heavily into his current consumptive and discretionary iPad needs.
No commentary necessary.
I'm PayPal Verified
The Hoarding Continues: China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve
While
the highly "sophisticated" traders that make up the gold market
continue to buy or sell the precious metal based on whether the Fed will
or will not do the NEW QE tomorrow (or just because, like Bruno Iskil,
they have a massive balance sheet, and can create margin position out
of thin air with impunity), China continues to do one thing. Buy.
Because while earlier today we were wondering (rhetorically, of
course) what China is doing with all that excess trade surplus if it is
not recycling it back into Treasurys, now we once again find out that
instead of purchasing US paper, Beijing continues to buy non-US gold,
in the form of 68 tons in imports from Hong Kong in the month of June.
The year to date total (6 months)? 383 tons. In other
words, in half a year China, whose official total tally is still a
massively underrepresented 1054 tons, has imported more gold than the
official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and
so on, and whose YTD imports alone make it the 14th largest holder of
gold in the world. Realistically, by now China, which hasn't provided
an honest gold reserve holdings update to the IMF in years, most
certainly has more gold than the IMF, and its 2814
tons, itself. Of course, the moment the PBOC does announce its official
updated gold stash, a gold price in the mid-$1000 range will be a long
gone memory.The Biggest Conflict Of Interest In Finance?
Maybe this is a naive question, but as Goldman clients get skinned again and again and again and again and again by Goldman’s failed calls — while Goldman itself continues to rack up prop trading profits
— I keep wondering just why anyone would take investment advice from a
trading firm? And beyond that, why is it even legal for trading firms to
advise clients? Isn’t this the biggest conflict of interest possible?
We know firms including Goldman have advised clients to buy junk that
the trading arm wants to get off its books.
We The Sheeplez... is intended to reflect
excellence in effort and content. Donations will help maintain this goal
and defray the operational costs. Paypal, a leading provider of secure
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I'm PayPal VerifiedGoldman's Market Summary Is Spot On
For once the squid is actually 100% correct, with or without the usual dose of dodecatuple reverse psychology.And there you have it. What is unsaid is that unless vol, and volume, pick up as we cross the half way mark of Q3, bank earnings for the quarter ended September 30 are going to be absolutely horrific. So get ready: the Goldmans of the world want to inject some major vol (and volume) into the market. And what Goldman wants, Goldman gets.Metaboring: it’s getting boring to make the comment that equities are again boring. Or maybe that’s called boring-squared. Here’s to hoping tomorrow is boring-cubed. To reinforce the point that nothing much is moving, our US portfolio strategy team has 20 ‘thematic baskets’ (that I can see on BBG anyways), and not a single one moved more than 1% today. None of the 8 ‘macro baskets’ moved more than 50bps.
Spot The Looming Crisis
Yes, we all know that Europe is in deep, deep, trouble, and we all know that Europe has a major fiscal deficit issue which is why well over half of the Eurozone is effectively locked out of the capital markets, and only has funding courtesy of various back door Ponzi schemes funded by the ECB, and we also all know that on a consolidated basis Europe's debt/GDP is very high. But the truth is that at least Europe is taking small steps to rectify its historic profligacy and is at least pretending to be implementing austerity (in some cases actually truly doing so). How about the US. Well, the chart below should answer that particular question. Because while the consolidated GDP of the US and Europe are nearly identical, they differ very materially in terms of both fiscal deficit, and total Debt/GDP. The chart below shows precisely where the differences lie between the United States of Europe and the United States of America.
Strong Stocks & Oversold Stocks
Admin at Marc Faber Blog - 26 minutes ago
In the US there have been a few strong stocks such as Kimberly Clark (KMB),
Johnson & Johnson (JNJ), Merck (MRK) and Altria (MO). They have all made
new highs. Also there are some deeply oversold stocks – mostly economically
sensitive companies such as miners. - *in CNBC*
Related: SPDR S&P 500 Index ETF (SPY)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
MASSIVE IMPORTS OF GOLD INTO CHINA/NY Empire index goes negative for first time since Oct/
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 37 minutes ago
Good
evening Ladies and Gentlemen:
Gold closed up today to the tune of $4.20 to $1603.70. Silver finished
the session up 5 cents to $27.81
Today it was a lacklustre day with no real activity to report on. The
only big news was the massive importing of gold into China last month.
In the last 6 months they have imported 383 tonnes of gold.
They have been selling treasuries and purchasing gold
Update On Housing And Government Economic Statistics
Dave in Denver at The Golden Truth - 4 hours ago
I take great pleasure when I post a view on an economic topic and then
subsequently I find even more empirical evidence that my view is correct.
After I published my updated thoughts on the housing market in this country
- which of course runs contrary to the noise coming from the media and the
bubblevision idiots - I found an article on housing which was actually
written a day before my post on Monday.
I have been following the Dr. Housing Bubble blog for several years and the
author posted a blog piece detailing the incredible rise in
low-down-payment FHA insured mortgages since 2... more »
Are we Witnessing a Shift in Investor Sentiment?
Trader Dan at Trader Dan's Market Views - 6 hours ago
As many of you who listen in to my regular weekly radio interview on the
KWN Markets and Metals Wrap are aware, in my mind, the most important
financial market is the bond or interest rate market. Everything revolves
around interest rates and as such, those levels are the key in
understanding where traders/investors are in their thinking at any given
moment in time.
Take a look at the following chart denoting the interest rate being paid or
the yield on the US Ten Year Note. Within the span of a mere 3 weeks or so,
this yield has shot up from down near 1.4% all the way to 1.8%. That... more »
Treasury yields rise to highest since May
Eric De Groot at Eric De Groot - 6 hours ago
The well-timed but poorly camouflaged risk-aversion to risk-taking transfer
(unwind) orchestrated in late May of 2012 is beginning to accelerate. The
experts; nevertheless, remain mystified by the low-volume election-year
stock rally. Completion of the trade (full unwind) occurs when mystified
experts proclaim bonds as "dead money" and retail money rushes to
distribute bonds in a panic (chart 1)....
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]Former Central Bankers Step Up Against The Central Banks
There are already three former European central bankers who criticize more or less openly the European Central Bank (ECB).
All these older central bankers experienced the inflationary periods
in the 1970s in detail, whereas the younger ones seem not to grasp what
inflation means. Modern central bankers seem to think that monetary inflation will not lead to price inflation in the long-term.
This might be true in countries where asset prices need to de-leverage
after the bust of real-estate bubbles. But it is certainly not true in
states like Germany, Finland or Switzerland, that did not have a
real-estate bubble till 2008. With current low employment and the aging
population, qualified personnel who speaks the local language will get
rare. PIMCO’s Bill Gross might be right saying that soon employees want to get a part of the cake and not only the stock holders. This essentially implies wage inflation, the enemy of the 1970s.ZZZZZZZZZZZZZZZZZZ!
Today was the lowest volume in S&P 500 e-mini futures (for a non-holiday trading day) in, well, bloody years
(and NYSE volume was as dire as Monday's). Today's ES range, under 9
points, was the lowest in the last eight days of low ranges and in fact
the eight-day range has only been this low a few times in the last few years and all but one of those marked a significant top.
The S&P wavered around unch for most of the day with a US
day-session-open ramp, post weak-data that signaled bad-is-good buying
in Gold and stocks. Treasuries kept on leaking higher in yield, now up
12-16bps on the week as the USD meandered around unch on the week - with
EUR weakness pulling it also back to unch on the week. VIX limped
lower by 0.25 vols to 14.6 (after touching unch) but we do note that VVIX (the implied vol of VIX) has been diverging higher in the last two days but it's getting kinda crazy when we are looking at compound options for any signal. HY credit underperformed once again - with a quite ugly flush into the close (on heavy volume).Fed's Fisher Reluctant To 'Bail Out White House' With More QE
It
was not enough that the Fed's Richard Fisher was 'allowed' on CNBC
this afternoon to expropriate himself and his merry-Fed-men from his
'fanatical' colleague nemesis Rosengren; but Maria B., for one glorious moment, asked a question so sensible it was stunning: "Is The Fed Bailing Out The White House?" The notably business-man-background Fisher was wonderfully heretical in explaining that additional
stimulus would have little impact, that the Fed's action would indeed
'look political', and that "US lawmakers need to get their fiscal act
together." While he doesn't see a high likelihood of a recession
in 2013, he comprehends clearly the wait-and-see 'defensive crouch'
that businesses are in given the huge uncertainty. On a slow day, with
so much print-and-it's-all-fixed hope, the clarifying vision of at
least one man on the FOMC is perhaps worth holding onto.Global Car-Maker Channel Stuffing Conspiracy 'Theory' Now Conspiracy 'Fact'
From
HFT to LIBOR manipulation and European bond legal-covenants, and now
Auto-manufacturer channel-stuffing; all conspiracy 'theories' proved
conspiracy 'facts' - as Gabby Douglas might say "Nailed It!" We have been vociferously pointing out the incredible levels of channel-stuffing occurring at GM in the US, then China, and most recently into Europe (must read here) and now the WSJ confirms the latter; as sales
of BMW and Mercedes, helped by heavy discounts and contingencies to
dealers, are being questioned. Kenn Sparks, a BMW spokesman, said its July sales total includes vehicles that were purchased by its dealers for use as what are known as "demos"—
cars used on lots for test drives. He declined to say how many
reported sales were demos, saying BMW doesn't release the figure.
"These vehicles may stay on the lot because they are used as demo
models," he said. BMW's incentives appeared to help propel the car
maker to a 1,900-vehicle lead over Mercedes-Benz (as stunningly ridiculously surprisingly 7-Series sales tripled MoM, and 3-Series doubled).The Sentinel Case - Another Nail In The Coffin Of 'Market Confidence'
Traditional
legal principles are seemingly pretty clear and straightforward on how a
good faith acquisition of stolen goods is to be treated: the
buyer, even though he is not criminally liable, can not acquire title to
stolen property. The failed futures brokerage Sentinel Management Group
lost the money of its clients in when it went into bankruptcy in 2007.
According to the SEC, the firm misappropriated the funds belonging to
its clients. Since then, creditors of the company have been fighting
over who has title to certain assets. On the one side are the customers
of Sentinel, whose funds and accounts were supposed to have been
segregated from the company's assets. On the other side there is New
York Mellon Bank, which lent Sentinel $312 million that were secured
with collateral mainly consisting of said – allegedly 'segregated' –
customer funds. The result: 'Banks that received what were
essentially misappropriated goods as collateral do not have to return
them to their original owners as long as they are deemed to have acted
in good faith'. Legal questions aside, one thing is already
certain: customers of futures brokerages can no longer have faith that
their assets are in any way segregated or protected. This is yet another
chink in the 'confidence armor' that has propped up the financial system to date.Crushed Consumption: The Unintended Consequence Of Bernanke's Arrogance
With
the Fed lowering interest rates and flattening the curve in an effort
to squeeze any- and every-one into risk-assets and mal-investment; the
sad truth of this action is that it forces a drastic unintended
consequence on the growing population of people that actually care
about the future. Critically, as Citi points out, lower yields require much higher rates of saving (both corporates and households)
and while 10% of salary allocated to 'retirement savings' will meet its
goals with a 4% return hurdle, at current low yields, the average-joe in the street will need to 'save' 25% of his income - cutting heavily into his current consumptive and discretionary iPad needs.Summarizing America's Record Drought In One Picture
No commentary necessary.
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