Jim Willie: Morgan Stanley Faces IMMINENT FAILURE & RUIN, May See 1st Private Stock Account Thefts

from Silver Doctors:

Jim Willie’s latest Hat Trick Letter, ‘Firestorms & Currency Twisters‘ is a MUST READ!!
Willie states that Morgan Stanley faces IMMINENT FAILURE & RUIN, that The older employees are selling all of their stock, and that Many workers are making contingency plans for their next positions in another firm.
He states that JP Morgan will devour the carcass, and that The Morgue may be preparing to execute the 1st ever private stock account vaporization/ rehypothecation.
AN ABSOLUTE MUST READ!!! 
Begin with a preface to any meaningful that could change the entire US landscape, a redux of what happened four years ago. Consider the next Wall Street financial firm failure. It is in progress. It is not avoidable. It will have numerous ramifications. It will open the door to account thefts, the burial of documents, the ransack of undesired leveraged positions, the concealment of wrecked derivatives, and a path toward the merger of surviving (selected core) firms. It will urge an extreme defensive posture. Back in 2008, both Bear Stearns and Lehman Brothers fell. The former because they had too much gold exposure with anti-US$ hedges. The latter because they led in mortgage exposure. Both failures were greatly exploited. My favorite item was the reload given to JPMorgan on a quiet Saturday morning (convened at 6am no less) at the Bankruptcy court of Manhattan. The shadowy syndicate titan was handed $138 billion to handle the private accounts from the fallen banks. Instead, the funds represented a reload for JPMorgan to continue their gold suppression game. Of course, they have been defending American freedom with vigor, preserving the integrity of the US banking system, and assuring the way of life in the nation, while leeching $billions from the public trough. Since their grant, the unassailable JPM has seen fit to gobble private accounts at both MFGlobal and PFG-Best, with regulatory blessing as the courts sprinkled fascist holy water.
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Jim Grant Refuses To Get Lost In A "Hall-Of-Mirrors" Market

The bow-tied-and-bespectacled bringer-of-truth was on Bloomberg TV this morning providing his own clarifying perspective on what we should hope for (and what we should not) from J-Hole this weekend. Jim Grant's acerbic comments on Krugman's view of the world, on the gold standard as a "force for growth and stability", and the "unproven and truly radical methods" of the SNB and Fed, pale in significance when he is asked about the stock market distortions: "I think we live in a hall of mirrors in finance thanks to the zero interest rate regime and the chronic nonstop interventions," and when asked when Bernanke should start raising rates, the simple (yet complex) response is "Last Year! And Eric Rosengren would be in a different line of work." Must watch to understand the central-banker-meme-du-decade.

Some Clear Thinking On 'The Debt'

If you haven't heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world.  It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days. This portends two key points:

1. Anyone who thinks that inflation doesn't exist is a complete idiot;
2. To say that the trend is unsustainable is a massive understatement.

This is banana republic stuff, plain and simple... and smart, thinking people ought to be planning on capital controls, wage and price controls, pension confiscation, and selective default. Because the next trillion will be here before you know it.

Citigroup Has The Best Summary Of Europe's Fiasco Yet: "Losses Are Unquantifiable"

Feel like every day Europe is juggling hot potatoes? You are not alone. As the following graphic summary from Citi's Matt King (whose insight into Europe, liquidity conduits, shadow banking and a comprehensive picture of modern financial "innovation" has rapidly become second to none) shows, the hot potatoes are getting hotter by the minute, and are flying ever faster and higher. But the kicker: King has the best punchline on Europe we have yet encountered: "Losses are unquantifiable" Q.E.D.

Boom and Bust - The Evolution Of Markets Through Monetary Policy

The outcome of the next round of monetary policy will be similar to those in recent history mentioned in this paper... "Perceived inflation will go through the roof.  We’re talking about near 0% interest rates around the developed world (near-term rates in Germany hit 0% in the auction at the end of May and are expected to go negative).  Oh yeah, and massive inflation.  I think gold will have no trouble hitting $3,000/oz in the medium-term and I see copper tripling over the next decade.  This is, of course, until we hit the next bubble sometime around 2018 and start over again.  The trend remains: since the stock market crash of 1987, through the dotcom bubble, and into the real-estate & stock market bubbles of 2007, each euphoric high and ensuing crash have been more extreme than the last.  These extremes are fueled by the easing that is meant to cure us.  The policy that we are facing within the coming months/years will, as the trend dictates, trump them all, and so inevitably will its hangover."

The Rot Runs Deep 3: The Capture of the Professional Class

The Status Quo depends on the professional/managerial class to maintain order and keep the machine running. Since this class has more options in life than less educated lower-income workers, their belief in the fairness and stability of the Status Quo is essential: should their belief in the Status Quo weaken, so would their commitment to positions that require long work days and abundant stress....At every juncture where a decision to opt out (quit) or continue serving the Status Quo arises, the believer is co-opted by their desire to "stay in the game" for the promised slice of wealth and security. The risk-return calculus is heavily skewed to complicity, because the options for wealth and security outside the machine are meager and loaded with risk. It is my contention that the wealth and security promised by the machine in exchange for subservience are phantom, and the risk of the promises not being kept is much higher than generally assumed. ironically, those who opt out and accept the risk and lower compensation are actually more secure and much wealthier (in terms of well-being and autonomy) than those who submit to voluntary capture.

Odds of Global Recession Are 100%

Admin at Marc Faber Blog - 1 hour ago

"Odds of a global recession are 100 percent." - *in CNBC * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

Commodities: The Bull Market Will Continue

Admin at Jim Rogers Blog - 1 hour ago

The bull market will continue until a lot of supply comes on stream and the problems since 2008 ensure not a lot of supply is coming on stream. - *in Investment Watch* Related: United States Oil Fund LP (ETF) (NYSE:USO), SPDR Gold Trust (ETF) (NYSE:GLD), iShares Silver Trust (ETF) (NYSE:SLV), PowerShares DB Agriculture Fund (NYSE:DBA) *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 Bloom... more » 

 

Valencia now asks for a bailout/another bank raid

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 3 hours ago

Good evening Ladies and Gentlemen: Gold closed down today as the bankers orchestrated another raid.  The object of interest no doubt is silver. Gold finished the session at:  41659.80 down $6.70.  The price of silver fell by 5 cents to $30.77. The only big news was in Spain where the region Valencia requested a bailout. We will cover this story and others but first.... Let us head over to

 

Ultra-Famous Mogambo (UFM

Richard Daughty, a.k.a., 'The Mogambo Guru' at Mogambo Guru Report! - 3 hours ago

August 17 2012 Mogambo Guru Because I really am, personally, the Ultra-Famous Mogambo (UFM) who thinks he's famous, who thinks he knows everything about everything economic, and is quite arrogant about it in an unpleasant, sneering way, people think they can ask me questions about things I know nothing about, yet get a correct answer. Weird. Sometimes, though, they luck out by asking me a question where I, for some unknown reason, actually know the answer! Like, just this morning at breakfast, when my wife asked me "Okay, UFM who thinks he's so hot, do you know that ... more » 

 

Gold Daily and Silver Weekly Charts

SP 500 and NDX Futures Daily Charts - Updated After the Close

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

King of Shorts Increasing Long Position in S&P 500

Eric De Groot at Eric De Groot - 5 hours ago

The short-side pros always keeping their powder dry until cycles and technicals to agree will be waiting for statistical concentration (cycle readings above 2 sigma) as 2015 approaches. Mr. Chanos's expanding long position may reflect an expectation that this rally supported by time could have legs until 2013-2014. Chart: Dow Jones Industrial Average (DJIA) and Z Scores of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

Taibbi: The True Story of Mitt Romney and Bain Capital

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Draghi’s Master Plan Matrix

Following the dismal failure of Draghi's OpEd this morning (which we assume was a reprint of his much-anticipated - and now cancelled - speech from J-Hole) to jawbone anything but a very brief pop in EURUSD, we thought it useful to aggregate all the great-and-good deeds the ECB elder is considering (and why). Europe remains in a long-term deleveraging phase (as much of the developed world finds itself). This lack-of-demand for credit has crushed the so-called 'money-multiplier in Europe, just as it did in the US (which we discussed in detail here as worse than the Depression); as banks have simply stockpiled the vast sums of LTRO/ECB-collateralized funds. This has left him feeling less than his normal omnipotent self and so he is forced to act even more extremely (or talk about acting that way). The following matrix from Morgan Stanley outlines his policy options under various scenarios as we note few (aside from a rate cut) are actionable in the short-term, and even fewer are likely to make any difference to this long-term deleveraging-cycle

The Math Behind Italy's 28,000 "Cash For Gold" Outlets

A couple of weeks ago we wrote about how the Portuguese citizenry was being forced to sell its gold in order to eat.  It seems that the Italians have now joined this illustrious club.  What do you expect when you allow Goldman Sachs to impose technocrat dictator Mario “Three Card” Monti as your political leader?

The pawnbrokers, ...can hardly keep up with business. They normally have the gold quickly melted down and sent abroad, making it one of Italy’s fastest growing exports. Official gold sales to Switzerland leaped 65 per cent last year to 120 tonnes, up from 73 tonnes in 2010 and 64 tonnes in 2009.

That’s not just gold being exported, that is wealth being exported.  China says thanks.  At least you protected your bankster class from taking a hit on their bond portfolios.

Will The Current Market Distortions Last?

Recent market trends such as equity and debt strength, the periphery outperforming the core, Europe outperforming the US, banks outperforming non-financials, and unsecured credit outperforming secured all seem predicated on the belief that there will be a funding plan for Spain and Italy. The ECB's gradual draining of assets from the market combined with hopes of more liquidity (something we are already not short of) has created a problem of 'excess demand' but, as Citi's Matt King notes, this 'scarcity factor' has suspended normal market relationships. The question is, across a variety of scenarios, which recent market trends are more vulnerable than others.

VIX Rises, Equity Futures Fall, Volume Disappears (Again)

For the 22nd day of the last 23, the S&P 500 was unable to manage a 1% gain or loss, having only managed to gain/lose more than 0.25% four days in the last 16. It's dead Jim. S&P 500 e-mini futures (ES) volume was equal to its lowest volume of the year (in years) and NYSE shares traded were also near multi-year lows. While cash equity indices closed very marginally green, ES ended modestly red (shock horror). VIX kept leaking higher, closing at 17% (up 0.5 vols), its highest close in a month (and the premium-to-realized just keeps growing) - seems like noone wants to sell their stocks and everyone wants to hedge - how did that portfolio insurance work out last time everyone was on one side? EURUSD sold off - even with Draghi's OpEd and so today saw Equities Up (all <0 .15=".15" bps="bps" treasury="treasury" up="up" yields="yields">7Y), EURUSD Down 35 pips (and implicitly USD stronger by 0.23%), Commodities - Gold/Silver/Oil/Copper Down around 0.3-0.5%, and credit tracked stocks. A 7.75 point range in ES over its 24-hour period is almost multi-year lows and once again the late-day pull back from highs to VWAP (and into the red) was the only volume of the day. Energy lost, Discretionary gained (consumption data up?) as AAPL and FB dropped (ugliest at the close), and the 18-day range is the lowest since May07 (and we know what that was).

Currency Competition

Monopolies contribute to many problems - the record of evidence illustrates the potential inefficiency, waste and price fixing. Yet the greatest trouble with monopolies is what they take away - competition. Competition is a beautiful mechanism; in exercising their purchasing power and demand preferences, individuals run the economy. If we are for competition in goods and services, why should we disclude competition in the money industry? Would competition in the money industry not benefit the consumer in the manner that competition in other industries does? Why should the form and nature of the medium of exchange be monopolised? Shouldn’t the people - as individuals - be able to make up their own mind about the kind of money that they want to use to engage in transactions? Earlier, this year Ben Bernanke and Ron Paul had an exchange on this subject. It is often said in Keynesian circles that Bernanke is too tame a money printer, and that the people need a greater money supply. Well, set the wider society free to determine their own money supply based on the demand for money.

Is This The Fed's Secret Weapon?

As the world anticipates Bernanke's speech on Friday - which most do not expect to explicitly say "NEW-QE-is-on-bitches" - we started thinking just what it is that he can suggest that would provide more jawboning potential. His speech is likely to lay out 'lessons learned' and outline the various conventional, unconventional, and unconventional unconventional policy options available (as we noted here). While open-ended QE, cutting the IOER, and 'credit-easing' are often discussed, none would be a surprise; this reminded us of an article from Morgan Stanley two years ago - after QE2 - that raised the possibility of Price-Level Targeting (PT), which is quite different from Inflation-Targeting. While its cumulative effect could be anti-debtflationary, it is however tough to communicate, reduces the Fed's inflation-credibility, and could be seen as inconsistent with the Fed's dual mandate. Our hope is that by understanding this possibility, the mistaken shock-and-awe is dampened.

Your Tax Dollars At Work: The US Budget Visualized For Congressional Dummies

With a $3.8 trillion yearly budget, the US Government is the most powerful entity in the world. This simple infographic shows how the money was spent.

The Gold Standard Debate Revisited

The discussion over the GOP's gold standard proposals continues in spite of the fact that everybody surely knows the idea is not even taken seriously by its proponents – as we noted yesterday, there is every reason to believe it is mainly designed to angle for the votes of disaffected Ron Paul and Tea Party supporters, many of whom happen to believe in sound money. As we also pointed out, there has been a remarkable outpouring of opinion denouncing the gold standard. Unfortunately many people are misinformed about both economic history and economic theory and simply regurgitate the propaganda they have been exposed to all of their lives. Consider this our attempt to present countervailing evidence. The 'Atlantic' felt it also had to weigh in on the debate, and has published an article that shows, like a few other examples we have examined over recent days, how brainwashed the public is with regards to the issue and what utterly spurious arguments are often employed in the current wave of anti-gold propaganda. The piece is entitled “Why the Gold Standard Is the World's Worst Economic Idea, in 2 Charts”, and it proves not only what we assert above, it also shows clearly why empirical evidence cannot be used for deriving tenets of economic theory.

Good Is Bad (Again) As Beige Book Belies Optimism

The market does not seem ecstatic with the relative positivity from the Fed's Beige Book - good news is bad it seems - as via Bloomberg:

• *FED DISTRICTS SAW ECONOMY GROWING `GRADUALLY' IN JULY, AUGUST
• *FED SAYS MOST DISTRICTS SAW STABLE PRICES FOR FINISHED GOODS
• *FED SAYS `UPWARD WAGE PRESSURE' WAS `VERY CONTAINED'
• *FED SAYS REAL ESTATE MARKETS `GENERALLY SAID TO BE IMPROVING'
• *FED SAYS SIX DISTRICTS SAID ECONOMY EXPANDED `AT A MODEST PACE'
• *FED SAYS MOST DISTRICTS SAW INCREASE IN RETAIL SALES
• *FED SAYS BANKERS IN SIX DISTRICTS SAW RISING LOAN DEMAND

Doug Casey Uncovers The Real Price Of Peak Oil

Doug Casey is of the opinion that the Hubbert peak-oil theory is correct. In the 1950s, M. King Hubbert projected that US oil production would start declining in the 1970s, and he was accurate. Then he projected that in the mid-2000s, the world's production of light, sweet crude would start declining. He was quite correct about that, too. There will always be plenty of oil at some given price, but to produce oil – even conventional, shallow, light sweet crude – now costs close to $40/bbl in many places. Drilling in politically unstable jurisdictions with sparse infrastructure is neither cheap nor fun. We're talking about production costs of at least $80/bbl in many cases. In an industrial world with seven billion people, the only energy source that makes sense is nuclear power. Sure, you can use wind and solar from time to time and in certain places. But those technologies are extremely expensive, and they absolutely can't solve the world's energy problems.

As HELOC Delinquency Rates Hit A Record, Are Student Loans Next?

The punchline from today's Fed household debt and credit report is comparing student debt to one other favorite product of the housing bubble generation: HELOCs. We note home equity lines of equity because as of June 30, 2012, long after HELOCs were widely available to Americans locked in a rabid pursuit to extract as much equity as they could out of their homes, is when the 90+ day delinquent rate on this product hit an all time high of 4.92%, and is finally rising at a breakneck speed. What is fascinating is when one re-indexes the delinquency rate on HELOCs and student loans. While we admit that the "discharge" option on real estate-backed debt does have a material impact, the reality is that once the prevailing mode of thinking is one of just not paying one's student loans, it will be not the student loan chart which is already parabolic, but that which tracks delinquent student loans that will take its place in the exponential hall of fame.

Place Your Bets

The Chinese Stock Markets are returning to the lows of 2009 and the Europe is mired in a recession. The American Stock Markets are not far off their highs and we do not think this will continue. Mark Grant is quite negative, for all kinds of reasons, about our equity markets now and would be taking profits and returning to the more assured bets of getting yield from bonds and not from dividends. A dividend may be reduced or cancelled by the wave of some Boards’ hand one afternoon while senior debt cannot be cancelled without the company or the municipality going into bankruptcy so that the top of the capital structure is far safer than relying upon dividends for income. In the next sixty days we are faced with Greece, Portugal, Spain, Italy and ECB issues that are quite serious both economically and politically. You may think what you like but there is a lot of risk on the table; of that you may be assured. When someone says, “Buddy can you spare a dime” we would like to be the one being asked and not the one doing the asking. It is here where we stand and wait.

Real Estate Turnaround?

August 29, 2012, at 3:24 pm
by Jim Sinclair

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

There was some good news released yesterday by the Standard & Poor’s/Case-Shiller home price index.  Residential housing prices rose .5% year-over-year for the first time since June of 2010.  In a press release, David M. Blitzer, Chairman of the Index Committee, said, “All 20 of the cities saw average home prices rise in June over May and all were by at least 1.0%. . . . We are aware that we are in the middle of a seasonal buying period, but the combined positive news coming from both monthly and annual rates of change in home prices bode well for the housing market.”  (Click here for the complete Case-Shiller press report and release.)
Does a .5% increase (year-over-year) really “bode well for the housing market”?  It has been widely reported the Federal Reserve has spent trillions of dollars suppressing interest rates.  There’s been quantitative easing (money printing), “Operation Twist” and near 0% interest on a key Fed lending rate.  A 30-year mortgage is hovering at or near historic lows–around 3.5%.  This is all we got after all that?  According to the latest Case-Shiller report, “As of June 2012, average home prices across the United States for the 10-City and 20-City Composites are back to their summer 2003 levels.”  Home prices are back to where they were 10 years ago and this is good news?
The 0% Fed interest rate policy and suppression game may be great for home buyers, but it is a total rip-off for savers.  People trying to get a return on their hard earned money are being robbed of hundreds of billions of dollars a year because of artificially suppressed interest rates.  CD’s are paying a fraction of a percent for locking up money for years!
Bloomberg was also jumping on the “good news” housing band wagon yesterday.  “Finally, the housing market is forming a bottom,” Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co., said on Bloomberg Television’s “In the Loop” with Betty Liu. “That should be welcome. It is not surprising because affordability is so attractive right now.”  (Click here for the complete Bloomberg story.)  I guess Mr. El-Erian is right when he says, “the housing market is forming a bottom.” But I think you have to add one caveat to the equation, and that is the housing market is forming a bottom as long as mortgage interest rates are artificially suppressed!
More…

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