The Bernank Fails To Deliver As Chairman Checks To Congress

Bernanke takes the wind out of the market's euphoric sails: "Substantial further expansions of the balance sheet could reduce public confidence in the Fed's ability to exit smoothly from its accommodative policies at the appropriate time. Even if unjustified, such a reduction in confidence might increase the risk of a costly unanchoring of inflation expectations, leading in turn to financial and economic instability."

The Schizophrenic Market Update - Buy The Rumor, Then BTFD

 
It's been 20 minutes and in that time we have been entirely depressed as every risk-on asset dumped to the day's lows or lower and now we are entirely euphoric - there is still hope - as Gold/Silver make new highs, stocks recover all their losses, Treasury yields contonue to fall, and the USD plunges...

Ahead Of The Bernank's Big Speech - Market Is In QE-On Mode (Apart from FacePlant)

After this morning's low volume stop-run to the highs (divergent from Spain's 10Y fulcrum security), we have gone nowhere during the day-session so far - even with a small miss on Chicago PMI and beat in Confidence. But with a few minutes to go until his big moment, markets are trading in a QE-ON mode in anticipation of Ben's big words (except FB -4%). Treasury yields down, USD down, Stocks Up, Gold Up, Oil Up. Primed for disappointment...

Donations will help maintain and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified

 

Follow the Retail Stocks

Eric De Groot at Eric De Groot - 2 hours ago

Why not? This party bus won't stop rolling until the wheels fall off unexpectedly. That won't happen until time and negative divergences in key markets suggest the lug nuts have loosened. Retail Sales to S&P 500 Ratio: Headline: Retailers fare well in August, sales beat estimates (Reuters) - Nearly all U.S. retailers posted... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

Singapore Has The Best Education In The World

Admin at Jim Rogers Blog - 3 hours ago

Singapore has the best education in the world, the best healthcare, the best everything. I think that the best gift that I can give two children born in 2003 and 2008 is to know Asia and to speak Mandarin. - *in MSN Malaysia * * *Related: iShares MSCI Singapore Index Fund (ETF) (NYSE:EWS) *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.*

The $3,200,000,000,000 Question: Why Housing Has Much More To Drop Before It Bottoms

It is no secret that having failed repeatedly at the trickle down aspect of QE1, QE2, Op Twist 1, Op Twist 2 (and implicitly LTRO 1 and LTRO 2) as it pertains to the man in the street (if not the man in Wall Street, who was subject to 1-2 years of subpar bonuses which have since regained their upward trendline), the last effort the central planners of the world, and the administration, have is to furiously do everything in their power to reflate housing one more time, following what is already a triple dip in home prices ever since the December 2007 start of the Second Great Depression. Which is why month after month we get seasonally fudged, conflicted and outright manipulated data from various sources how housing has bottomed, for real this time, and things are finally looking up. Remember: with any con game, the key word is confidence, and the US consumers need to regain their confidence. Sadly, as the following very simple chart and accompanying explanation, the answer to the housing question is only one: there will be no housing recovery until much more debt is eliminated. $3.2 trillion to be precise. Everything else is merely fits and spurts of upward action predicated by easy money hitting the market either directly, or via the "REO-to-Rental" stimulus program du jour, which lasts for a few months then promptly evaporates.

Morgan Stanley Prepares To Be Tri-sappointed; Sees No Policy Boost From US, Europe, Or China

Despite high-flying equity indices, there is some underlying concern that all is not rosy in the global economy (and that Fed/ECB/PBoC might not save the day this time). As Morgan Stanley notes, the overcrowded trades are overweight US and within US overweight defensives - implying cyclicals are starting to reflect the current global macro weakness and that there are further downgrades to global growth forecasts to come. Expectations for a repeat of H2 2011's surge in positive surprises are misplaced as several unique factors were at play last year - and are very much lacking this year; moreover global growth indicators are significantly weaker than a year ago. With this background, MS also does not expect imminent QE in the US; the Chinese policy response continues to lag expectations; and there are several hurdles to executing ECB action - all of which leave them expecting further substantial downgrades to 2013 consensus earning forecasts in the US.

Relying Upon The European Numbers

We fear that the data given to us by Europe is erroneous. The resident institutions in the world where one thinks that accurate data may be found for Europe are Eurostat and the Bank for International Settlements. Spain and her official admission of "dynamic provisioning" has raised all kinds of questions in our mind and has unsettled our belief in the data provided by Europe. It is now quite apparent that the numbers for all of the Spanish banks, are inaccurate. It may well be that the EU or the ECB could bury what may be found but it would be awfully tough for the IMF to hide any material breaches. Even when considering the IMF however, certain questions are raised. Their projections for Europe and each and every country in Europe have been wrong, dead wrong and far too optimistic. This then would explain why Europe is in such trouble because if the data is not truthful then the truth, as most often happens, leaks out from underneath that which is hidden and provides the outcomes that the Europeans have tried so hard to avoid. Whatever the real numbers are, they are providing the consequences that result from their actuality.

On Bernanke's Legacy In His Own Words

Overnight the WSJ's Jon Hilsenrath did his best to entirely redirect the discussion of Bernanke's legacy by setting up so many strawmen even TS Eliot would be totally lost. Instead of focusing on the person who was, together with his predecessor, was directly responsible for a crisis, which over the course of 30 years of "great moderation" pulled over $30 trillion in future demand to the present (benefiting almost exclusively the banker class), and which will guarantee pain and suffering for generations of Joe Sixpacks, he portrayed Bernanke in the light of St. Ben, or the person who may or may not have done enough to save Capitalism. We fail to fall for the bait. We hope nobody else will either. Which is why we present the following compilation of documented Chairsatan greatest hits from the public record. It speaks more than any planted article ever could.

Ron Paul Recants The GOP, Just Says No To Keynesians

As we anticipate more demand-rigging, pump-priming, can-kicking experiments from Bernanke today, Ron Paul just came out with his latest stream of truthiness (via Bloomberg):

• *REP. PAUL SAYS BOTH PARTIES KEYNESIANS, GOP 'NOT HIS PARTY'
• *REP. PAUL SAYS FED PRICE FIXING
• *REP. PAUL SAYS FED FLOODING MARKET WITH MONEY

Indeed, what is the opposite of 'between a rock and a hard place' when deciding on just who will provide 'change' in November.

Hilsenrath Sets Off To Preserve Bernanke's "Legacy"

Yesterday, when the market was plunging (by less than a whopping 1%, yet magically defending the 13K "retirement off" threshold in the DJIA), we wondered: where is the Fed's favorite messageboard: WSJ "journalist" Jon Hilsenrath. We found out at 3 am, when instead of releasing another soon to be refuted rumor of more easing, we discovered that the scribe was busy doing something very different: discussing the pros and cons of the Chairsatan's legacy.

Frontrunning: August 31

• Romney Promises to 'Restore' U.S. (WSJ)
• Dirty Harry Makes Surprise Appearance (WSJ)
• It has always been about the gold: Time for eurozone to reach for the gold reserves? (FT)
• EU Plan Said to Give ECB Sole Power to Grant Bank Licenses (Bloomberg)
• More attempts to marginalize Germanty: Brussels pushes for wide ECB powers  (FT)
• Justice may be blind but it has geographic limits: Apple Loses Patent Lawsuit Against Samsung in Japan (BBG)
• ECB Said to Use Greek Myth for Security on New Euro Banknotes (Bloomberg)
• Alberta deficit set to triple on slumping oil prices (Globe and Mail)
• Reid's ties to China-Nevada solar plan draw ire (Reuters)
• Bernanke may hint at QE without boxing Fed in (Reuters)
• Berezovsky loses against Abramovich  (FT)
• Spain Considers Bankia Re-Capitalization Without EU Money (Bloomberg)

 

Overnight Recap And Today's Key Events

Following a series of bad economic news (Eurozone unemployment, rising inflation, plunging retail sales in Germany, Spain and Greece) out of Europe, and the usual sound and fury out of the ECB signifying nothing (was there finally news that Weidmann and/or the Buba are endorsing anything Draghi is doing - instead of seeking to potentially quit his post leaving the ECB in limbo? No? Then stop flashing red headlines which are completely irrelevant), the EURUSD has decided to go on its usual countersensical stop hunt higher in hopes an algo or two will push it even higher on nothing but momentum, with has one purpose only: to allow the pair enough of a buffer so that when it does fall after the J-Hole disappointment, it has more room to drop. And as European newsflow fades into the periphery, everyone is once again focusing on Wyoming where Bernanke is now broadly expected to do absolutely nothing. What else are market participants focusing on? Here is the full ist courtesy of Bloomberg daybook.

Stagflation: Eurozone Unemployment Hits Record High As Inflation Rises Above Expectations

In July European unemployment rose to 11.3% - a record post-Euro rate, and the highest since 1990 for the constituent countries. While this was in line with estimates, what surprised the market, and has sent the EUR paradoxically higher (paradoxically, because all a continent in stagflation, which Europe by now most certainly is, is to have its currency rise just when it needs to export more goods, in the process entrentching its economic plight even further) is that inflation in August picked up from 2.4% to 2.6%, beating expectations of a 2.5% increase, allowing the European misery index to stand head and shoulders above the rest of the world.









Today’s Items:

First…
Will China Lend Battered Euro Zone a Helping Hand?
http://www.cnbc.com

Here we go again folks.   Could Merkels request compel China to come to the EU’s rescue?   Give me a break.   China is not interested in throwing their money down a fiscal black hole.   They want tangibles and they want items for the future and paper promises just do not cut it.

Next…
Gold To Hit $3,000 On Supply Concerns
http://kingworldnews.com   1
http://kingworldnews.com   2

Sean Boyd, CEO of Agnico Eagle, believes that gold could reach $3000 based on lack of supply.   There is increased demand for physical gold by both as investments and by Central Banks.   This is because, when looking at the late 70′s, gold had the highest returns against other asset classes like T Bills, Bonds, Stocks, and real estate.   Another force for gold is China is about to stimulate their economy, with about $1 trillion in money printing, for projects to boost the economy.

Next…
Lindsey Williams
http://www.youtube.com

Okay everyone, grab your pencil and paper because here is what Lindsey Williams has to say…
1. People around the world do not trust their governments and that is a part the elite’s plan using chaos.
2. The elite are having a problem with Syria…   They did not expect Assad to last this long.
3. The elite are having problems and are very upset with Obama for different reasons than the average American.
4. War is the instrument used most by the elite to get what they want.
5. Something drastic is about to happen to the dollar and there could be an imminent shutdown of the U.S. Government.
6. The Fed is scared to implement QE3 because the BRICS have threatened to drop the dollar period.
7. Do not sell your gold and silver and it is the only way to protect your financial assets.

Next…
The Silver Lining
http://www.naturalnews.com

Yes, we will have an economic collapse; however, here are a few reasons to be optimistic about the future.
1. 95% of America’s land space is rural, “wide open” space and even drones would be limited.
2. Government forces are limited and can only cover high-density population areas — the cities.
3. Rural culture teaches a survival mindset.   Farmers are very resourceful and innovative.
4. FEMA round-up attempts will not work very well with prepared “country folks”.
5. Those who survive will respect liberty, justice, personal responsibility and the order of law.

Next…
Alaska Gets It
http://www.shtfplan.com

Because of its remote location and dependence on a flow of supplies from the lower 48 states, Governor Sean Parnell is making disaster readiness a hallmark of his administration. His solution is simple…   Build giant warehouses full of emergency food, with a 5 year shelf life, and supplies, just in case.   With Anchorage alone, having about 300,000 people, he is going to need some big warehouses folks; however, he should be applauded for his efforts.

Next…
Ron Paul’s Maine Delegates
http://www.youtube.com
http://www.theblaze.com
http://bangordailynews.com

Ron Paul’s Maine delegates, some of whom were war veterans, were barred from the Republican coronation err… convention.   The Republican National Leadership acknowledged that there the Maine voting was filled with irregularities; however, their solution was to replace some of Ron Paul’s delegates with ole “Goldman Sachs” Romney cronies.

Finally, please prepare now for the escalating economic and social unrest.   Good Day!

Donations will help maintain and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified