US Government Proposes Law Making It Illegal For Them To Kill You

Last Friday, US Congressman Dennis Kucinich introduced HR 6357, a bill which aims to ‘prohibit the extrajudicial killing of United States citizens’ by the federal government. In other words, in the Land of the Free, they need to pass a law to prevent the government from indiscriminately murdering its own citizens. Now if this doesn’t give one reason to pause and consider the distortions of liberty that have taken place in western civilization, I don’t know what will. Ask yourself, are you really living in a free society? Are you free? If not, why not? What else could possibly be more important? It takes courage to answer honestly.

Europe's Scariest Chart In More Detail

While the surging unemployment rates across Europe are the most troublesome for politicians (and the extreme youth unemployment even more so), if we take a closer and more 'local' view of the stress, it is interestingly more regional than national. While Spain and Greece stand out, the unemployment rate, as analyzed in the chart below by Flute Thoughts blog, does not follow national borders. Northern Italy, for example, seems to have more in common with the German-speaking regions of Europe than with Southern Italy; France appears more peripheral than core; and the former eastern Germany still has not caught up with the west (so much for fiscal integration). Eastern Europe also has some striking differences as we suspect the ovals are slowly collapsing in on themselves as the reality of lower revenues from more unemployed procyclically pulls the euro-zone into depression.

And You Thought Q2 Earnings Were Bad?

In a world of slow stagnating growth, foreign exchange variations can have a dramatic impact on top and bottom lines - especially in a market where hedges are flummoxed by government-influenced gap-after-gap and mismatch. As Goldman notes the headwinds of FX into Q2 are acute and have been painful for multi-nationals - with several high-profile companies missing and or adjusting down forecasts due to the rise of the US dollar. In spite of all the focus on Q2 earnings, we remind investors that Q3 and Q4 will also see significant currency headwinds - an impact we (and Goldman) believes is far from priced in for many companies in the market - a total top-line drag of over 5% YoY.

Lauren Lyster Interviews Chris Powell of GATA on Gold, Silver Manipulation, and the Fed

German economy imploding/Europe also releases bad economic data on industrial production and factory orders/gold falls but silver rises

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 5 hours ago

Good evening Ladies and Gentlemen: Gold closed today down by $3.20 to $1609.70 by closing comex time.  However at the same time, silver seems to be bucking gold's trend as this metal rose by 33 cents to $28.08.  We are now in the midst of the summer doldrums with our major European politicians on holiday.  Thus do not expect any action until September. Today we saw poor industrial production

 

 Gold Daily and Silver Weekly Charts - Capping and Coiling

SP 500 and NDX Futures Daily Charts - Technical Trade

 

A Primer To Intraday Market Moves

While we have looked in the past at the incredible dominance of FOMC days when it comes to stock market performance, recent intraday performance of the major equity indices has had a somewhat repetitive and rhythmic structure. We know volumes surge, pause, and surge; Tradestation has dug one step deeper into the actual performance structure intraday and found some fascinating trends. From the extremely clear final-hour ramp to the oscillating bull-bear opening moves (and the European close positive bias) across almost 30 years of price behavior in bull and bear markets. The afternoons dominate market performance in bull markets and the morning session dominates the weakness in bear markets - so fade the opening rally, buy the dip, cover half into Europe, hope into the close appears the 'empirical route of least resistance' - for now. And this tidbit, if stocks close higher on average into the 3 p.m. hour, their probability of moving higher into the 4 p.m. close is 70%. 

US Midwest Hit By Perfect Gasoline Storm

Retail gasoline prices in the U.S. Midwest were as much as 50 cents higher than in the rest of the country. By Monday, the price of a gallon of regular unleaded jumped 13 cents from last week in Detroit to settle at $3.99.  The spike in retail gasoline prices follows a series of pipeline spills in Wisconsin and refinery shutdowns in Chicago and elsewhere. The impact of the string of industrial incidents on consumers in the region may be short-lived, but retail prices rarely decline as fast as they increase. The 'cluster of bad luck' leaves refineries shut down at a time when the region is using "summertime gasoline," a blend not manufactured very much outside of the Midwest.

On Wall Street Crime Pays - A 350% IRR To Be Exact

Previously we showed that when it comes to Wall Street's returns, the 8% market return benchmark that every first year analyst finds in Ibbotson's is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning "investment", which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles "without admitting or denying guilt" and in the process is slapped with a fine that barely covers the government's legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.

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 online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified

Gold And Grand Theft Economics

The tectonic battle between a market trying to deflate its debts and the central banks attempting to reflate the impaired assets to maintain the status quo is becoming increasingly violent. In a brief clip, Santiago Capital's Brent Johnson explains the fallacy of fiat money, the dynamics of the velocity of money in a 'troubled' economy, the 'we are going to give the banks a lot of money' plans, and the inevitable 'there's no more money' moment when the inflationary and deflationary tremors come unstuck and become shock-waves. There will be no warning, no bell-ringing at the onset of the end of the monetary system itself as he notes the slate of Stability & Growth Pacts (EU) and The Recovery and Reinvestment Act (US) will inevitably be seen as the greatest unauthorized transfer of wealth in history - and being exposed to gold stored outside of the banking system, there is a protected route as the world staggers from tremor to tremor.

A Matter Of Trust - Part Two

Putting our trust and faith in a few unelected bureaucrats and bankers, who use their obscene wealth to buy off politicians in writing the laws and regulations to favor them has proven to be a death knell for our country. The captured main stream media proclaims these men to be heroes and saviors of the world, when they are truly the villains in this episode. These are the men who unleashed the frenzy of Wall Street greed and pillaging by repealing Glass Steagall, blocking Brooksley Born’s efforts to regulate derivatives, encouraging mortgage fraud, not enforcing existing regulations, and creating speculative bubbles through excessively low interest rates and making it known they would bailout recklessness. They have created an overly complex tangled financial system so they could peddle propaganda to the math challenged American public without fear of being caught in their web of lies. Big government, big banks and big legislation like Dodd/Frank and Obamacare are designed to benefit the few at the expense of the many. The system has been captured by a plutocracy of self-serving men. They don’t care about you or your children. We are only given 80 years, or so, on this earth and our purpose should be to sustain our economic and political system in a balanced way, so our children and their children have a chance at a decent life. Do you trust that is the purpose of those in power today? Should we trust the jackals and grifters who got us into this mess, to get us out?  

3rd Worst Soybean Yield Signals Price Susceptible To Further Spikes

Recent consolidation in Soybean prices may be susceptible to notably higher prices since JPMorgan's new Soybean Crop Condition Index suggests the crop is in much worse condition than average conditions since 1986. They see the 2012 crop faring slightly better than the 1988 crop (thanks to seed technology) but suggest this could be the third-worst crop since 1964 in terms of actual yields relative to trend. Critically, if long-term drier- and hotter-than-average weather occurs (which appears likely from forecasts with soil moisture levels so low as to make even marginal rain practically useless), there is considerable downside risk to the soybean yield forecast (and implicitly upside risk to prices).

This Is Why The NAR Will Never Be Prosecuted For Facilitating Money Laundering

Over the past month America's ever vigilant law enforcers have taken to task not one but two foreign (domestic bank lobbies are sufficiently large to make Congress muppets perfectly eager to look the other way as noted previously) banks: HSBC and now Standard Chartered, for money laundering. Yet, when it comes to the true elephant in the room, which is not foreign and is fully domestic, they continue to ignore events such as this one just described by the Wall Street Journal: "A Florida home that originally listed for $60 million has sold for $47 million, a record for a single-family house in Miami-Dade County. The home, in Indian Creek Village, had been on the market since early 2011, when construction was still being completed. The asking price was reduced to $52 million this year." And the punchline: "The identity of the buyer, a foreigner who purchased the home in the name of a U.S.-based limited-liability company, couldn't be learned." In other words a foreigner who may or may not have engaged in massive criminal activity and/or dealt with Iran, Afghanistan, or any other bogeyman du jour at some point in their past, and is using US real estate merely as a money-laundering front perhaps? Sadly, we will never know. Why? As explained before, it is all thanks to the National Association of Realtors - those wonderful people who bring you the existing home sales update every month (with a documented upward bias every single time) - which just so happens is the only organization that actively lobbied for and received an exemption from AML regulation compliance. In other words, unlike HSBC, the NAR is untouchable, even if it were to sell a triplex to Ahmedinejad on West 57th street.

Oil And Treasuries Lead Stocks Higher As Credit Lags And Volume Remains Flaccid

UPDATE: PCLN -12.5% AH (and DIS missed)
Admittedly slightly higher than yesterday's year-to-date lows in volume, today was not much better as S&P 500 e-mini futures (ES) pushed up over 1400, back to three month highs, on decent average trade size (following yesterday's low average trade size). Treasuries tracked stocks (higher in yield) but Gold and the USD disconnected (from stocks) into the US open and never really recovered. ES rolled off its highs late on and reverted perfectly to VWAP once again and rather coincidentally the 'correction' occurred just as ES priced in Gold hit the year's highs (which intriguingly is a critical cliff's edge level from a year ago). Oil's surge (and Treasury's weakness) were the main risk drivers which pushed CONTEXT to lead stocks higher as FX, credit, and PMs trod water largely. Interestingly, in ETF-land, our capital structure models were flashing red with HYG down notably and credit underperforming broadly, along with VIX (and VXX having an outside up-close day) not playing along with the rally. With VIX bouncing off 4-month lows, closing back over 16% (and up on the day), the pull to VWAP into the close on decent average trade size, the plunge in short-interest, and the underperformance broadly of credit markets (especially the ever-reliable-for-a-pump-job HYG); we'd be a little nervous up here (especially after Europe's sovereign and credit weakness today).

Consumer Credit Misses As Revolving Credit Has Biggest Contraction Since April 2011

Just like every other aspect of the global economy and capital markets, the sudden, rapid moves in every times series are becoming increasingly more pronounced: today's case in point - consumer credit. Instead of rising by the expected $10.25 billion in June, following the whopper of a May bounce when it grew by $17 billion, in June, credit rose by only $6.46 billion. On the surface this was not a big miss and was the 10th consecutive increase in a row, driven exclusively by non-revolving credit - i.e. student and GM subprime loans. However, looking below the surface shows that following May's biggest monthly surge in revolving credit since November 2007 (+$7.5 billion), consumers have again expressed a revulsion to credit, with revolving credit sliding by $3.7 billion: this was the biggest monthly contraction in revolving credit since April 2011, and before that since February 2009. Did Americans developed a sudden taste for credit funded consumption in May, only to puke it all up and then some in June? It sure appears that way based on recent retail sales numbers. The July retail sales number will simply confirm if the re-icing of US consumers has continued for another month.

Federal Reserve 'Complete Re-education And Positivism' Plan About To Begin

The global printer-in-chief is about to address educators in Washington DC (via the video conference stream below) focusing on the need for personal financial education in the wake of the financial crisis. We suggested a name for the plan: The 'Complete Re-education And Positivism' Plan but given the audience was K-12 educators of economics, the C-R-A-P Plan just did not seem appropriate. Perhaps his proposal is the BTFD Plan?

Spain Refuses To Be Bailed Out If There Are New Conditions

And so the fly in the ointment arrives as beggars are not only choosers but have completely lost their minds. As we explained very, very clearly over the weekend in "In Order To Be Saved, Spain And Italy Must First Be Destroyed", the market, courtesy of its primary function of discounting being completely and utter distorted and destroyed thanks to central planning, "priced in" the fact that Spain will be bailed out in the only possible way: by making a Spanish bailout next to impossible, sending its bonds so much higher that Rajoy could not possibly see any need in demanding a bailout (something which as Art Cashin explained further today will very much infuriate Obama). Well, as often happens, we may have been ahead of the market by a few days. And reality as well: because as of minutes ago Spain's PM confirmed precisely what we warned against - that by frontrunning Spain's destruction, and hence rescue, it has doomed Spain to a fate far worse. From France24:  Spain will not seek eurozone financial aid beyond an agreed rescue for its banks if more conditions than those already agreed for recapitalising lenders are attached, an EU source said Tuesday." The problem is that if and when the inevitable bailout demand comes, not only will there be more conditions, but Spain will effectively cede sovereignty to the Troika explicitly, and to Germany implicitly (for the full breakdown see here). Which again begs the question: which came first - the market frontruning the bailout or the government refusing to request a bailout on the market frontrunning the bailout and so ad inf. 

The Global Arms Trade Interactive Inforgraphic

In the aftermath of the most recent mass shooting incident in Colorado, which in turn is merely the latest in a long series of tragic mass killings, the question of weapon propagation has once again come to the forefront, if not as much in the presidential race. This of course excludes the fact that for centuries the military industrial complex has long been the staple manufacturing core of many economies, and has competed only with banking when it comes to making a disproportionately small group of people disproportionately rich (even if it has "boosted" numerous economies alive in times of Krugmanian GDP stimulus need). Which is why we present the following interactive infographic from chrome experiments as a quick and dirty guide on who the biggest sources of arms trade (either imports or exports) in the world are. We doubt there will be many surprises over the usual suspects.

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 online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified