*Breaking* Your CRIMINAL Gov’t: Judge Throws Out CFTC’s Position Limits Rule

from Silver Doctors:

For anyone who wondered, the banksters are above the law- just ask Mr. Dimon and his Presidential cufflinks.
DC District Court Judge Robert Wilkins this afternoon threw out the CFTC’s position limits rule, scheduled to go into effect Oct 12th.
The metals manipulation will only end when FREE MARKET FORCES OVERWHELM the bullion banksters.
IT IS TIME TO FIGHT BACK BY EMPTYING EVERY LAST DOLLAR OUT OF EVERY ACCOUNT YOU OWN- CHECKING, DEPOSIT, STOCK, RETIREMENT- AND TAKE DELIVERY OF PHYSICAL SILVER!!!
(Reuters) – A U.S. judge handed an 11th-hour victory to Wall Street’s biggest commodity traders on Friday, knocking back tough new regulations that would have cracked down on speculation in energy, grain and metal markets.
Judge Robert Wilkins of the U.S. District Court for the District of Columbia threw out the U.S. Commodity Futures Trading Commission’s new position limits rule, and sent the regulation back to the agency for further consideration.
Wilkins ruled that, by law, the CFTC was required to prove that the position limits in commodity markets are necessary to diminish or prevent excessive speculation.
Read More @ Silver Doctors

Fitch Warns UK Likelihood It Loses AAA Rating Has Increased

One-by-one, the highest quality collateral in the world (according to ratings that is) is disappearing. To wit, Fitch warns that a downgrade of the UK's AAA rating is increasingly likely: "weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating, which has been on Negative Outlook since March 2012." The Negative Outlook on the UK rating reflects the very limited fiscal space, at the 'AAA' level, to absorb further adverse economic shocks in light of the UK's elevated debt levels and uncertain growth outlook. Global economic headwinds, including those emanating from the on-going eurozone crisis, have compounded the drag on UK growth from private sector deleveraging and fiscal consolidation as well as from depressed business and consumer confidence, weak investment, and constrained credit growth. But no mention of unlimited QE? Fitch expects only a weak recovery beginning in 2013 and output is not expected to surpass its 2007 pre-crisis peak until 2014.

The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default

Whereas earlier today we presented one of the most exhaustive presentations on the state of the student debt bubble, one question that has always evaded greater scrutiny has been the very critical default rate for student borrowers: a number which few if any lenders and colleges openly disclose for fears the general public would comprehend not only the true extent of the student loan bubble, but that it has now burst. This is a question that we specifically posed a month ago when we asked "As HELOC delinquency rates hit a record, are student loans next?" Ironically in that same earlier post we showed a chart of default rates for federal loan borrowers that while rising was still not too troubling: as it turns out the reason why its was low is it was made using fudged data that drastically misrepresented the seriousness of the situation, dramatically undercutting the amount of bad debt in the system.  Luckily, this is a question that has now been answered, courtesy of the Department of Education, which today for the first time ever released official three-year, or much more thorough than the heretofore standard two-year benchmark, federal student loan cohort default rates. The number, for all colleges, stood at a stunning 13.4% for the 2009 cohort. And while it is impossible using historical data to extrapolate with precision what the current consolidated federal student loan default rate is, we do know that there is now $914 billion in federal student loans (which also was mysteriously revised over 50% higher by the Fed just a month ago). Using simple inference, all else equal (and all else has certainly deteriorated), there is now at least $122 billion in federal student loan defaults. And surging every day.
Ladies and gentlemen: meet the new subprime.

Why A Soft-Landing Is Bad For China

Counter-cyclical measures cannot solve structural problems. If the market is counting on monetary easing or fiscal stimulus to lift the Chinese economy out of the current slump, we believe they will be disappointed (as we have discussed a number of times recently). Without major structural reforms, we believe, like Credit Suisse, that China will be growing around 7-8% in the coming years, rather than the coming quarters. The core problem is the sudden disappearance of investment interest from the private sector. The market, it would appear, is factoring in a global growth slowdown (which will be quickly recovered from thanks to Central Bank largesse). As Credit Suisse notes, though, in the case of China as a growth engine via stimulus, the market is not quite prepared for a prolonged slowdown and its repercussions on corporate cash flows. What ultimately matters is not how far economic growth will fall, but how long it will fall. When the business environment deteriorates, pricing power diminishes and account receivables surge, the debt chain tends to break down at the weakest link. Until the structural issues have been addressed, we expect mediocre growth to be the new norm in China.

Where Do Your Tax Dollars Go?

 
Presented with little comment, but in around three minutes, this clip provides a modicum of clarity on just where all that money goes... It seems 47% is the new number to really care about - perhaps 53% should also be of note...

Gold Still Stuck near $1785 - $1800

Trader Dan at Trader Dan's Market Views - 52 minutes ago

Over the last two weeks, gold has had some difficulty clearing the stubborn resistance level beginning near $1785 and extending towards $1800, round number psychological resistance. It has poked its head into this zone but cannot breach it as of yet. When examining the chart it is not difficult to understand the significance of this region. Note that there have been two occasions in the last year, one back towards October 2011 and the other earlier this year in Jan/Feb, when gold either punched through this level or came extremely near to it, but failed to close ABOVE it. Look ca... more » 

 

Euro Gold and Swissie Gold Score New Lifetime Highs

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

 

Monthly Gold Charts

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

 

Pork Shortage Everywhere Except For Politics

Eric De Groot at Eric De Groot - 2 hours ago

Observations: The severe drought of 2012 will be rockin' Trader Dan's bread and butter in 2013. Live hogs are moving up the money flow table (see table). Hogs diffusion index has risen from -9% to 28% within a span of a week. This reflects aggressive accumulation. Pigs are extremely smart, so Jim, don't let Petunia read this. Table: COT Money... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

Happy Friday - End Of Quarter

Dave in Denver at The Golden Truth - 9 hours ago

This is what QE to infinity looks like: *Unlike our past asset-purchase programs, this one doesn’t have a preset expiration date. Instead, it is explicitly linked to what happens with the economy. We might even expand our purchases to include other assets.* - San Francisco Fed President John Williams LINK This is what it is being used for: *Lindsey said that with the Fed purchasing at least $40 billion a month in mortgage debt through QE3, “they are buying the entire deficit.” * - Lawrence Lindsey, Chairmen of the National Economic Council and assistant to the President on ec... more » 

Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).  
 Donations will help 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   

Welcome To The Era of 'Ugly' Inflation

Ray Dalio recently described the characteristics of a “beautiful deleveraging” in which equal doses of austerity, write-downs, and inflation gradually lighten the load of impaired debt. Two things can turn beautiful inflation into ugly inflation: Wages don’t inflate along with prices and the currency depreciates as money is printed excessively. This might not matter for a nation that is a net exporter of goods and services.  But for nations that import essentials such as oil and grain, this is a catastrophe, as wages are flat while the cost of imported energy and food skyrocket.  Households have less money to spend, and servicing debt becomes increasingly burdensome. Welcome to the United States of Ugly Inflation.  Real household income (i.e., adjusted for official inflation) has declined 8% since 2007; the cost of oil, medical care and higher education has climbed; and government revenues have stagnated even as demand for government services has increased. As a result, the entire beautiful deleveraging scenario is at risk.
 

Apple Has Satanic Close To Quarter

Ending the day at the lows, AAPL's stock price traded with a truly demonic $666.66  after-hours. The reason for the last few days' weakness? Who knows when a bubble bursts but between its analog to MSFT's meteoric rise, the stocks' weight in the NASDAQ, 'disappointing' first-week sales, Cook's Maps FUBAR, supply-chain disruptions, or the market having to suddenly price in the arrival of the new Obama-phone, volumes have been picking up.

Gold And Silver Lead Everything Week-, Month-, Quarter-, & Year-To-Date

It has been a volatile week but equities have drifted lower overall with today's early going retracing all of yesterday's gains only to bounce post Europe's close (once again) on the farce of the Spanish bank audit. Reality sunk in into the close though a glance at S&P 500 futures in the last 30 minutes suggest more V-Fib than trend (as VWAP came into play amid heavy volume at the close). EUR weakness (and USD strength) lifted DXY to a 0.75% gain on the week (almost mirroring Copper and Oil's 0.9% loss on the week) but Gold and Silver popped into the close to end the week unchanged (notably outperforming other asset classes). Treasuries held on to 5bps (5Y) to 12bps (10y & 30Y) yield compression on the week - with some volatility this afternoon bringing them back off their low yields of the week. Utilities ended the week up 1% as the only green sector with Tech, Materials, and Energy all -1.5 to 2% on the week. VIX ended the week up around 1.6 vols (in line with stocks at around 15.6%) and credit continued to lag equities modestly. Cross-asset-class correlations fell away a little this afternoon as stocks meandered but broadly risk-assets suggest some more downside to equities.

How Oliver Wyman Manipulated The Spanish Bank Bailout Analysis

The biggest (non) news of the day was Oliver Wyman ("OW") conducting an "independent" audit of the Spanish banking system to validate the previously disclosed funding needs of Spain's banks which were announced back in June (just a week after Mariano Rajoy "insisted" no bank bailouts are needed). What OW really did was exercise 1 in a financial analyst's playbook: to goal seek a number in excel using a variety of input variables, especially several fudge factors that are tangential to the matter at hand, yet which provide the biggest bang for the buck. In this case the target of the goalseeking exercise was to get a final headline number for bank capital needs to be just as expected, or €60 billion. Sure enough it the number was €59.3 billion, just a little bit less than consensus. This is the total number of cash the bank system will need in order to be considered viable, and unless something has changed drastically, the cash will come from new debt issued by Spain, which in turn funds its bank bailout fund, the FROB (a process explained here). While it is a given that several months from now we will go through this whole entire exercise to find out how much more cash Spain's banks will need, for now what is curious is to understand what the fudge factor was that OW abused to allow it to get the desired result. That fudge factor is what is known as "excess capital buffer", whose usage in the model to plug a major capital shortfall gap is non-sensical and shows that the real funding needs of Spain's banks will be far greater, even absent future deterioration.

Gasoline Supply Concerns Trump Crude SPR Rumors

While most eyes are firmly focused on the crude oil markets for indications of QEternity spillover, geopolitical escalation, and/or SPR rumors; the end-product market has gone only one way for the last two weeks. Thanks to technical supply constraint concerns (refinery maintenance in the Atlantic Basin and supplies at their lowest in over four years) RBOB gasoline prices have jumped over 18% in the last few days as crude has drifted - which can only mean down-the-supply-chain price rises at the pump for car-drivers everywhere (whether you can find the gas station using your new iPhone 5 or not).

Friday Humor: Don't Drink And Trade

On June the 30th 2009 oil mysteriously jumped by more than $1.50 a barrel during the night, to reach its highest price in eight months, the kind of swing that is caused by a major geopolitical event. The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA). (Hint: 'Drunken Blackout')

All Your Private Data Are Belong To Obama

When it comes to spying, eavesdropping on its citizens as well as the complete invasion of American privacy, the first thing that comes to mind is the Patriot ACT and Dubya. And with good reason: because while the rest of the world may "hate us for our freedoms", they certainly love us for the fact that the NSA usually can autocomplete sentences before they are written in any electronic medium (recall: NSA Whistleblower Speaks Live: "The Government Is Lying To You"). However, as it turns out that the first thing that should be coming to mind is none other than the current administration and Barack Obama. Here are the facts: as the ACLU reveals using documents released by the Justice Department following months of litigation, "federal law enforcement agencies are increasingly monitoring Americans’ electronic communications, and doing so without warrants, sufficient oversight, or meaningful accountability." How "increasingly"? Look at the chart below and decide. From the ACLU: Between 20909 and 2011 "the number of people whose telephones were the subject of pen register and trap and trace surveillance more than tripled. In fact, more people were subjected to pen register and trap and trace surveillance in the past two years than in the entire previous decade."

Spanish Bank Capital Shortfall As "Good" As Expected: Live Press Conference Webcast

Spanish stress test results are out. Surprise - Oliver Wyman's audit finds that Spanish banks have an approximate EUR60bn shortfall - as expected - see below for pass/fails.

• *SPAIN SAYS 7 BANKS HAVE NO CAPITAL NEEDS       :SAN SM, BBVA SM
• *SPAIN STRESS TESTS SHOW CAPITAL SHORTFALL OF EU59.3 BLN :SAN SM
• *SPAIN BANKS HAVE EU53.7 B CAPITAL SHORTFALL AFTER TAX IMPACT
• *BANKIA STRESS TEST SHORTFALL AFTER TAX EFFECT IS EU24.74 BLN
• *SANTANDER, BBVA, CAIXABANK, KUTXA PASS STRESS TEST      :SAN SM
• *SABADELL, BANKINTER, UNICAJA PASS STRESS TEST  :SAN SM, BBVA SM

The discrete needs are: Bankia: 24.7; Catalunya Caixa: 10.8; Novagalicia 7.2; Banco de Valencia: 3.5; Banco Popular 3.2; Banco Mare Nostrum: 2.2

Winners and Losers Since QE3

As we end the month and quarter, we remind ourselves that a massive amount of the recent 'strength' in risk markets occurred on just two days - ECB and Fed statements. Reflecting on the post-euphoria 'sell-the-news' or BTFD meme, we look at how various asset classes and securities have performed post-QEternity. Two lessons are clear: Front-Run The Fed (every time) and Buy Precious Metals.

Charting The Death Of Europe's Bond Markets

From the financial repression and encumbrance of the central banker to the wild speculators and their angry 'fast-money' flows, we continue to hang on every tick in Europe's bond markets (for both validation of a political leader's view or confirmation of his asininity). The sadder truth is that Europe's secondary bond trading market has shriveled. Spain's Treasury just released August's daily average Spanish government bond trading volumes and they have plunged over 40% YoY - now at levels (under EUR40bn per day) not seen since 1996 (pre-Euro-zone). It strikes us that once they lose the secondary market then the primary market will be very close behind (thanks to liquidity concerns among other things) - unless of course the ECB really does soak up all future issuance and hold-to-maturity.

Goldman Cuts Q3 GDP Forecast To Stall Speed 1.9%

There was a time when Goldman, which recently went full retard with its bull thesis, seeing only upside in everything from stocks (and a once in a lifetime opportunity to sell bonds... just like in March, and then back in the summer of last year, and so on), to EURUSD, to housing, just like it did in December 2010, only to be humiliated a few short months later, had its Q3 GDP forecast at 2.3%. In fact the latest Q3 annualized forecast of 2.3% economic growth as recently as September 11. How much has changed in two short weeks. Apparently, out of leftfield, so many things have gotten worse that a whopping 0.4% or 20% of the growth in the quarter has bee eliminated in under three weeks. Just out from Goldman: "While nominal personal spending and core PCE prices rose in line with expectations in August, real spending gains were modest and income grew less than expected. We reduced our Q3 tracking estimate for real GDP growth from 2% to 1.9%." And that's why Jan Hatzius gets paid the big bucks. Only problem is now that Goldman has gotten the QEternity it lobbied for so long and hard, where will the upside growth come from?

Fed Buys $20 Billion In QE3 Mortgages; Jobs Created: Zero

 
Yesterday, the Fed reported the first $20.1 billion in net, non-rolling purchases of MBS eligible under QE3 (consisting of FHLMC, FNMA, GNMA and GNMA2, most likely the bulk of them coming out of a certain office in Newport Beach which has decided to start locking in its monster profits for the year after getting QEternity spot on). End result: jobs created or saved zero. But at least we got the first recessionary PMI print, and an employment component that was the lowest since March 2010. When in doubt who can destroy the economy the best, just leave it to Benver.



Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).  
 Donations will help 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