Today is the First Notice Day for Silver and So We Have This Bear Raid on Metals

BTFD...Buy The F--king Dip...

As I have said for 3 years...If it goes down a little buy a little...If it goes down alot...Buy alot...

You may not get another chance like this one...

Keep Stacking...

Now where did I put those keys...

 

 

20 Economic Statistics To Use To Wake Sheeplez Up From Their Entertainment-Induced Comas

from The Economic Collapse Blog:

The Dow has closed above 13,000 for the first time since 2008, and the mainstream media is declaring that a strong economic recovery is underway. Barack Obama is telling anyone who will listen that his economic policies are a huge success, and U.S. consumers are piling up astounding amounts of new debt. Unfortunately, this euphoria about the economy will be short-lived. None of the long-term problems that are destroying the U.S. economy have been solved. In fact, there are dozens of statistics that can be quoted that prove that the U.S. economy is in far worse shape than it was when the recession supposedly ended. If dramatic changes are not made very rapidly, our nation is going to smash directly into an economic brick wall. Sadly, most Americans are so addicted to entertainment that they have no idea what is about to happen. Most of them are “sheeple” that are content to trust that the “experts” know exactly how to fix our problems as they continue to enjoy their entertainment-induced comas. After all, it is much easier to turn on “American Idol” or “Dancing With The Stars” than it is to think about debt ratios and monetary policy. But that doesn’t mean that we should not try to wake the sheeple up. It just means that it will not be easy.
Read More @ TheEconomicCollapseBlog.com

European Central Bank’s Cheap Money Has Just Turned Toxic Banks Into Zombie Banks

Last year a well-known senior former investment banker travelled around southern Europe’s troubled banks offering them a simple trade.
by Harry Wilson, Telegraph.co.uk:

He knew their balance sheets were stuffed with billions of euros of toxic loans. He also knew the banks could neither afford to finance these assets any longer, nor had enough capital to recognise the full-scale of the losses they would have to take to sell them.
Meeting with the banks he offered to buy not the odd loan here and there, but their entire toxic portfolios. The catch: well he wouldn’t offer them the face value of the loans, not even close, but he’d pay enough that it would be at a level where the bank could take a manageable loss.
Everything was going well until December when the ECB launched the first three-year long-term refinancing operation, or LTRO, which saw eurozone lenders borrow €489bn (£414bn) from the central bank at a 1pc interest rate.
Read More @ Telegraph.co.uk

ECB LTRO 2: €529.5 Billion As 800 Banks Ask For A Handout, Total 3 Year ECB Liquidity > €1 Trillion

The results for the second European 3 year discount window operation, pardon LTRO are in, and the winner is…

• ECB ALLOTS EU 529.5BLN IN 1,092 DAY REFINANCING TENDER
• ECB SAYS 800 BANKS ASKED FOR THREE-YEAR LOANS

Since the expected range was €200 billion – €1 trillion, and just above the median €500 billion, this is clearly within expectations, however notably less than what the Goldman investor survey expected at €680 billion. What is certainly scary is that the number of banks demanding a hand out was a whopping 800, well above the 523 from the first LTRO: clearly many banks are capital deprived.
Read More @ ZeroHedge.com

ECB Prepares to Open Loan Spigot Again in Debt Crisis
http://www.cnbc.com/id/46532683

Iran, A Nuclear Threat? Or... Dollar Threat?
http://dont-tread-on.me/?p=14034

Home Prices Fell in December in Most US Cities
http://finance.yahoo.com/news/home-prices-fell-december-most-140231740.html
http://www.cityfarmer.info/2011/10/19/urban-agriculture-detroit-average-house...

Buffett: Banks Victimized by Excesses of Ousted Homeowners
http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evi...

Something Big is About to Happen in Gold & Silver
http://kingworldnews.com

Bradley Manning Nominated for Nobel Peace Prize
http://www.weeklystandard.com/blogs/bradley-manning-nominated-nobel-peace-pri...
http://www.bradleymanning.org/news/icelandic-parliamentarians-nominate-bradle...

What's Your Favorite "On the Ground" Recession Indicator?
http://www.oftwominds.com/blogfeb12/recession-indicators2-12.html

Goodbye, First Amendment
http://rt.com/usa/news/348-act-tresspass-buildings-437/

Ron Paul: Restore the American Republic

The Chinese Economy Is Slowing Down More Than What Is Perceived

Admin at Marc Faber Blog - 19 minutes ago

My view is that the chinese economy is slowing down more than is perceived. Whether it is going to have a crash or just a meaningful correction, that we do not know. - *in a recent Bloomberg Radio interview* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* more »

 

 

Iran: A Military Confrontation Would Be Madness

Admin at Jim Rogers Blog - 29 minutes ago

It is pretty clear that many people in Washington DC and in America who want to do something with Iran. There seem to be many people in Israel who want to do something with Iran. I find it madness if they would even think about something like that because if they do, it is going to cause all sorts of havoc in the world and retaliation, but people do foolish things all the time. - *in ET* Related, United States Oil Fund ETF (USO) *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’... more » 

 

 

Dollar Alternative Anyone?

from Greg Hunter’s USAWatchdog.com:

Countries around the world have been actively seeking ways to not do business in dollars for the past few years. The U.S. dollar is the so-called world reserve currency, but the big question is for how long? China and Japan are beginning to shun the dollar in trade between the two countries. Mind you, this is the 2nd biggest economy in the world doing business without dollars with the 3rd biggest economy in the world. Russia and China, also, have an agreement to not use the dollar, and even India recently announced it would trade gold for oil with Iran. Additionally, the International Monetary Fund (IMF) has been calling for an alternative to the buck. The big push is not because the U.S. dollar is held in the highest regard but because it is losing its luster on the world stage. After all, the debt debacle facing America is worse than what the Greeks are facing according to a new report from U.S. Senator Jeff Sessions. (Click here to see for yourself.) Senator Sessions says every man, woman and child in the country is saddled with $44,000 in debt.
The difference is the U.S. can print money, Greece cannot, and that is the problem for the rest of the world. Every dollar that is created devalues the other dollars in existence. America spends 43 cents more than it takes in every year. There is a current $15 trillion national debt and future commitments that some economists say exceeds $200 trillion. Last August, Congress raised the debt ceiling $2.1 trillion to $16.4 trillion. That money is likely to run out before the November 2012 election, and then, Congress will need to raise it again or the U.S. will face default. My money is on yet another debt ceiling increase. Is there any wonder why the world wants to move away from the dollar? The more you have of something, the less it is worth.
Read More @ USAWatchdog.com

Planned Regime Change in Syria

Afghanistan, Iraq, Libya, and now Syria had peace and calm until Washington intervened belligerently.
Strategies and tactics vary. Objectives are consistent. They involve replacing independent regimes with pro-Western ones by any means, including war.
Three unwinnable ones rage. Nonetheless, Obama plans more. Syria’s target one. For the past year, US-instigated violence ravaged parts of the country. Thousands have been killed, many others injured.
Syria’s gripped by fear. Heavily armed killer gangs rage out of control, and direct foreign intervention looms. More on that below.
Read More @ SJLendman.Blogspot.com

Rick Rule: Fear Driving Demand, Moving Gold & Silver Higher

from King World News:

With gold, silver and oil on the move, today King World News interviewed Rick Rule, CEO of Sprott USA. Rick spoke with KWN about the significant move in gold and silver and what we are looking at going forward. Here is what Rule had to say: “First, gold and silver were oversold and they are now coming back. Second, gold and silver move according to fear and you and I both know there is a lot to be afraid of. Has Greece been fixed? Of course not. So gold and silver have moved higher.”
Rick Rule continues: Read More @ KingWorldNews.com

Silver Price Hot Streak Continues

from GoldMoney.com:
The silver price streaked higher yesterday, with Comex silver for delivery in March gaining 4.6% to settle at $37.14 per troy ounce – the highest settlement price since September. Gains in the gold price were more modest, with gold for April delivery up 0.8% to $1,788.40, but nevertheless, this is above resistance at $1,780, and offers gold a good shot at running up to and perhaps besting the $1,800 mark. As MarketWatch reports, platinum and palladium also joined the party, with March palladium gaining 2.1% to settle at $719.75, and April platinum up 0.5% to $1,723.50.
As has been the dominant market trend of late, equities rode higher together with precious metal prices, the Dow closing above the psychologically important 13,000-level at 13,005.12. This is the Dow’s highest closing price since May 19 2008. Commodities as a whole also gained, though crude oil prices declined for the second day in a row. As is typical on a “risk on” day, the dollar fell against the euro and other major currencies, with the Dollar Index down 0.38% to close at 78.27. However, yields on longer-maturity US Treasuries continued to fall – contrary to what one would expect in an environment where inflation concerns are growing. Looks like we’ll have to wait a little while longer for the “Bond apocalypse” that Peter Schiff and others have been warning about.
Read More @ GoldMoney.com

Lew Rockwell: 258. We’re All Lawbreakers Now

from LewRockwell.com:

Mr. X talks to Lew Rockwell about America’s injustice system.
Click Here to Listen to the Interview

Greece’s Default Gets Messier

Back on February 17, the European Central Bank sprinkled its magical pixie dust on its Greek sovereign bonds, with the effect that they effectively ended up exempt from the restructuring and haircut being inflicted on everybody else. I wasn’t very excited about this development at the time:

On a conceptual level, it makes sense that the Troika — of which the ECB is a third — might be granted immunity from haircuts, in return for providing new money to Greece. On a legal and practical level, however, this is ugly — and you can be quite sure that it’s only going to get uglier from here on in.

Today, we’re beginning to get a hint of the messiness that this decision caused.
First, there’s a formal question which has been put to ISDA’s Determinations Committee, asking whether the ECB magical pixie dust, combined with the passage of the Greek law to allow the haircut, doesn’t in itself constitute a credit event under ISDA rules.
Read More @ SeekingAlpha.com

With LTRO Out Of The Picture, Portugal Is Back In Play – Bonds Sliding

As the ECB has stopped its SMP bond-buying and now the LTROs are all done (until the next one of course), Portuguese bond spreads have been increasing rapidly and post-LTRO today even more so. While broadly speaking European sovereign risk is modestly higher this week (and notably steeper across the curve) leaving funding costs still very high for most nations, Portugal has exploded over 100bps wider (and almost 70bps of that today post-LTRO) to back over 1200bps wider than Bunds. Only Italian bonds are better and even there they are leaking back to unch from pre-LTRO. Perhaps, shockingly, more debt did not solve the problem of too much debt and with growth and deficits being questioned in Ireland and Portugal (and Spain), it’s clear the newly collateralized loan cash the banks have received won’t be extended to the medium-term maturities in sovereign bonds. Read More @ ZeroHedge.com




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Silver Surges 4.5% To Over $37/Oz On "Massive Fund Buying"

Silver as ever outperformed gold yesterday and traders attributed the surge to “massive fund buying” and to “panic” short covering. Some of the bullion banks with large concentrated short positions covered short positions after the technical level of $35.50/oz was breached easily. Massive liquidity injections and ultra loose monetary policies make silver increasingly attractive for hedge funds, institutions and investors. This time last year (February 28th 2011) silver was at $36.67/oz. Two months later on April 28th it had risen to $48.44/oz for a gain of 32% in 2 months. There then came a very sharp correction and a period of consolidation in recent months. Silver’s fundamentals remain as bullish as ever and the technicals look increasingly bullish with strong gains seen in January and February.

 

ECB LTRO 2: €529.5 Billion As 800 Banks Ask For A Handout, Total 3 Year ECB Liquidity > €1 Trillion

The results for the second European 3 year discount window operation, pardon LTRO are in, and the winner is...

• ECB ALLOTS EU 529.5BLN IN 1,092 DAY REFINANCING TENDER
• ECB SAYS 800 BANKS ASKED FOR THREE-YEAR LOANS

Since the expected range was €200 billion - €1 trillion, and just above the median €500 billion, this is clearly within expectations, however notably less than what the Goldman investor survey expected at €680 billion. What is certainly scary is that the number of banks demanding a hand out was a whopping 800, well above the 523 from the first LTRO: clearly many banks are capital deprived.

James Murdoch Steps Down As News International Executive Chairman

As if we didn't have enough news on this Leap Wednesday, here's this.

Jump the Creek for Silver

Eric De Groot at Eric De Groot - 43 minutes ago

I agree with Jim, silver more a game than monetary solution, but it's still one heck of a game. Paper silver keeps chewing through resistance (swing highs) on increasing volume. The absorption of supply, i.e. the breach of resistance on increasing volume, illustrates what Richard Wyckoff described as a technical sign of strength (SOS). The 9/22/11 gap from 36.22 to 38.34 represents one of the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

The Collapse of Another Virtuous Cycle Will Burn Investors Again

Eric De Groot at Eric De Groot - 1 hour ago

The gold to silver ratio (GSR) represents an excellent measure of liquidity (QE) within the financial system. A rising GSR trend occurs when gold outperforms silver. This setup implies a scramble for liquidity or safety during uncertainty. A falling GSR occurs when silver outperforms gold. This setup suggests a growing appetite for risk and reluctance to hold cash. The counter trend rally of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

All I Want For (Early) Christmas Is A Bank License And LTRO X+1

Dear Santa, I know Christmas is a long way off, but I was hoping that you could get me a European Bank License and another round of LTRO.   I promise to be a good boy, and borrow as much money as the ECB will possibly give me, with minimal equity, and buy as much 3 year in and in paper as I can.  I’m afraid I might not be able to bring myself to buy Spanish or Italian debt, but with the broad range of assets available against the money, I’m sure I can find something I like.  I’m not greedy, I don’t need to make 2% of carry, I would be happy with 1%, after all, I my only qualification is having a bank license, and I have no real equity in the deal (though after 3 years if all goes well, I will be a very rich man, or bank).

The Relentless Household Deleveraging In Charts

While the narrower spreads in Europe created the unintended consequence of perversely reducing the urgency for banks to delever their over-stuffed balance sheets (and in fact in many cases likely make them worse thanks to the ECB), the US Household continues to (sensibly) slowly but surely reduce their leverage. As today's Bloomberg Brief notes though, the slow pace of deleveraging will continue to weigh on growth over the next few years - even as they have drawn down debt as a percentage of personal income from its peak in June 2009 at 114.76% to 101.1% at the end of 2012. There is a long way to go to the apparent Maginot line of supposedly sustainable 90% and with wage growth stagnant, the bulk will come from debt reduction in true balance-sheet-recession style - putting still more pressure on a perniciously polarized government to do anything about it.

Following "Fine-Tuning", Second Print Of Q4 GDP Lifts It Back To Initial Estimate Of 3.0%

Back on January 27, before the impact of the trillions in liquidity injections by the central banks was fully appreciated, the advance Q4 GDP print came in below estimates of 3.0%, printing at 2.8%. Today, we just got the flip flop to that, after the second revision just printed at 3.0%, on expectations of an unchanged print at 2.8%. The reason: a fine-tuning, whether seasonally adjusted or not, which improved 4 of the components of Q4 GDP (Fixed Investment, Personal Consumption, Imports, Government Expenditures), while reducing two (Inventories and Exports) nominally. Net result, a slight bump from 2.8% to 3.0% for the second Q4 GDP print. The final GDP revision will be made public on March 29 - if history is any precedent, it will be back down to 2.8%. As for the reason why the market is less than delighted with this "beat" is that with EUR Brent at record highs, courtesy of everyone else but primarily the ECB doing the equivalent of QE 3 in 2011's biggest deception play, it firmly take the Fed's punchbowl away at least for 3 months. More at 10 am when The Bernank testifies.

LTRO 2 Bring Down: €529.5 Billion Gross, €311 Billion Net; Discount Window Stigma Resurfacing

Just like the first time around, the net gain from the LTRO when taking into account rolling off instruments, will be lower than the Gross amount. How much? According to SocGen, the final number by which the ECB's deposit account will increase will be about €210 billion less than the overhead number. From SocGen's Lauren Rosborough: "The LTRO outcome: €529.53bio was allocated to 800 institutions (compared with €489.19bio allocated to 523 institutions in Dec). The net increase, according to our economists, is €311bio (adjusted for yesterday’s MRO reduction, 3m LTRO allotment this morning, and the roll-off of the 3m and 6m LTROs tomorrow). The allocation was above our and at the upper end of the market range of expectations. After a brief and limited positive risk move (AUD/USD spiked to 1.0857), currencies are broadly unchanged and the EUR/USD is lower, possibly reflecting positioning unwinds. The LTRO outcome opens the way for further positive risk moves (high-beta, non-Japan Asia, lower DXY) but recent price action suggests to us that the rally is fatigued." Net: this means that following settlement, European banks will park not €500 billion but up to €810 billion with the ECB, on which they will collect 25 bps (while paying 1%, aka inverse carry as described here first). It also means that in three years Europe's bank will have to not only pay the ECB €1 trillion in case (assuming there is no perpetual rollover of the LTRO, which there will be), but also delever by another €2.5 billion, for net asset drop of €3.5 trillion. Good luck building up shareholder equity by the same amount to offset unchanging liabilities.

With LTRO Out Of The Picture, Portugal Is Back In Play - Bonds Sliding

As the ECB has stopped its SMP bond-buying and now the LTROs are all done (until the next one of course), Portuguese bond spreads have been increasing rapidly and post-LTRO today even more so.  While broadly speaking European sovereign risk is modestly higher this week (and notably steeper across the curve) leaving funding costs still very high for most nations, Portugal has exploded over 100bps wider (and almost 70bps of that today post-LTRO) to back over 1200bps wider than Bunds. Only Italian bonds are better and even there they are leaking back to unch from pre-LTRO. Perhaps, shockingly, more debt did not solve the problem of too much debt and with growth and deficits being questioned in Ireland and Portugal (and Spain), it's clear the newly collateralized loan cash the banks have received won't be extended to the medium-term maturities in sovereign bonds.

Busy Leap Day: Today's Full Schedule Of Events

On this leap day, we have a busy schedule which includes the second Q4 GDP revision, Chicago PMI (expect another massive beat courtesy of consumers confident that they can have Apple apps, if not so much food, since they still don't pay their mortgages), various Fed speakers, of which most important will be Ben Bernanke who takes the podium in Congress at 10 am for his semi-annual monetary policy report.

Summary Of Wall Street's Opinions On LTRO 2

The following people are paid to have an opinion, whether right or wrong, so it is our job to listen to them. Supposedly. Reuters summarizes the professionals kneejerk reaction to the LTRO 2. Because when it comes to explaining why Europe's banks are not only not deleveraging but increasing leverage while paying an incremental 75 bps on up to €700 billion in deposits soon to be handed over to the ECB, one needs all the favorable spin one can muster.

Frontrunning: Leap Year Edition

• Euro-Area Banks Tap ECB for Record Amount of Three-Year Cash (Bloomberg)
• Papademos Gets Backing for $4.3B of Cuts (Bloomberg)
• China February Bank Lending Remains Weak (Reuters)
• Romney Regains Momentum (WSJ)
• Shanghai Raises Minimum Wage 13% as China Seeks to Boost Demand (Bloomberg)
• Fiscal Stability Key To Economic Competitiveness - SNB's Jordan (WSJ)
• Bank's Tucker Says Cannot Relax Bank Requirements (Reuters)
• Life as a Landlord (NYT)

As A Reminder, Here Is What Happened To Risk Following The Surge In Fed Discount Window Borrowings

Since for all intents and purposes the ECB's LTRO is equivalent (and likely accepts even 'looser' collateral) to the Fed's massive (for its time) liquidity injection following the failure of Lehman, a good question is what happened to stocks after the Discount Window usage spiked back in the fall of 2008. Spoiler alert: nothing good.

Initial Rally Fades In PMs, FX, And Equities Post LTRO

UPDATE: European Sovereigns not excited and PORTUG getting ugly...and corporate credit spreads leaking wider
EURUSD and equity markets are undecided, European sovereigns have rallied modestly back to earlier day tights but no further (and Portuguese debt is underperforming), and credit markets in Europe are leaking modestly wider so far. The biggest movers initially appeared to be AUD (carry FX as we noted earlier) and the precious metals (with Silver outperforming Gold so far). Cable (GBP) is weakening relative to USD and EUR and that is holding DXY up a little here. Treasuries are doing better. As we post, the USD is now strengthening, ES is losing steam, and gold and silver are slipping back. CONTEXT is lower than pre-LTRO as risk is leaking off for now.

LTRO 2 - Goldman's Take

Goldman waited exactly 20 minutes to try to comfort the market, especially the EURUSD which is getting increasingly jittery, that €1 trillion in Discount Window borrowings is a "positive." We beg to differ that trillions in more debt collateralized by candy bar boxes and condoms will cure an excess debt problem, especially with all the good collateral now gone, and we are confident that ongoing deleveraging needs will put a major cog in the system, especially since the only liquidity expansion move now is "fade", at least until the next major crisis.




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Gold Market Of The 70s Was A Dress Rehearsal

February 28, 2012, at 7:23 pm
by Jim Sinclair 

My Dear Extended Family,

Please keep focused on the fact that the gold market of the 70s was simply a dress rehearsal. What is taking place right now is the real thing.
The supposed "Curse of 13" is behind you in the break from $1900 to close to $1500.
The reaction was stopped because the need and use for QE to infinity is real and present in time. There is no other tool in the lender of last resort to the entire Western World’s toolbox other than QE which can be applied to create the degree of liquidity required to prevent a global implosion. No other tool can create infinite liquidity in a flash. There is no speculating on what might happen in the future. It has happened now.
Few are looking at dollar utilization falling in international contracting and settlement. That is a key element of 2012. The US dollar has enjoyed demand from settlement and contracting which it is now losing daily. Gold is gaining utilization as a competitive currency.
Enormous utilization was the blessing the dollar had when it was the reserve currency of choice. Utilization and settlement is falling fast as the dollar now is the reserve currency by default.
Very few have ever tried to quantify this serendipitous demand for the dollar. Allow me to assure you dollar utilization for these purposes is huge and extremely important to dollar valuation.
2012 is the year the dollar falls as a result of a significant drop in dollar contract and settlement utilization. Imagine the demand for gold as the dollar closes below the antiquated measure of .7200 on the redundant USDX. When this occurs you will be looking back at $2111 from higher levels.
Please keep in mind that this is not a dress rehearsal but rather the real thing. There is no practical means to handle the problems at hand. We are at the dead end of the road the can has been kicked down.
Volatility in gold is going to go wild so just keep your head down and hold your insurance close to your chest. The cheapest thing gold is the gold share with the most ounces versus its price.
Silver is a game, but one hell of a game. Another try by silver at $50 looks imminent.

Regards,
Jim

Norcini – Silver Shorts Literally Panic, Gold Shorts Now Worried

February 28, 2012, at 4:01 pm
by Eric King 

Dear CIGAs,

With silver breaking above the $37 level and gold trading $20 higher, today King World News interviewed legendary Jim Sinclair’s chartist Dan Norcini.  Norcini told KWN what we are seeing today is a major breakout in the silver market and panic from the shorts: “Today we are seeing a strong move higher in silver and in gold, but particularly the silver market, which is up over 4%.  Once silver took out $35.50 in a strong push, they ran a huge number of stops to the upside.  There were a lot of shorts covering, Eric, there was literally a panic among the silver shorts.”
Dan Norcini continues:
“There were three previous attempts at this level that were held back by the shorts and when this upside resistance level was breached, the shorts had no choice but to run for cover.  To compound their problem you had more fresh money pouring into silver, which simply added stress to the already panicked shorts.
We mentioned over the weekend in the KWN Weekly Metals Wrap that once silver cleared $35.50, there wasn’t a lot of overhead resistance in that market until roughly the $40 area….
Click here to read the full interview on www.KingWorldNews.com

ISDA Determinations Committee Accepts Question Related to a Potential Hellenic Republic Credit Event

February 28, 2012, at 4:24 pm
by Jim Sinclair 

Dear CIGAs,

The implications if this event comes to pass are huge!

ISDA Determinations Committee Accepts Question Related to a Potential Hellenic Republic Credit Event

LONDON, February 28, 2012 – The International Swaps and Derivatives Association, Inc. (ISDA), as secretary to the Determinations Committees (the DCs), today announced that a question relating to a potential credit event with respect to the Hellenic Republic has been submitted to, and subsequently accepted for consideration by, the EMEA Determinations Committee.
In accordance with the Determinations Committee Rules, a meeting will be held at 11AM GMT on Thursday, March 1 to determine whether a credit event has occurred.

Further information regarding the question is available at www.isda.org/credit.

About ISDA
Since 1985, ISDA has worked to make the global over-the-counter (OTC) derivatives markets safer and more efficient. Today, ISDA is one of the world’s largest global financial trade associations, with over 815 member institutions from 58 countries on six continents. These members include a broad range of OTC derivatives market participants: global, international and regional banks, asset managers, energy and commodities firms, government and supranational entities, insurers and diversified financial institutions, corporations, law firms, exchanges, clearinghouses and other service providers. Information about ISDA and its activities is available on the Association’s web site: www.isda.org.
ISDA_® is a registered trademark of the International Swaps and Derivatives Association, Inc.
Link to the full news release…

Jim’s Mailbox

February 28, 2012, at 6:36 pm
by Jim Sinclair 

Jim Sinclair’s Commentary

Compliments of CIGA Yahn:

Isn’t it ironic? The food stamp program, part of the Department of Agriculture, is pleased to be distributing the greatest amount of food stamps ever.
Meanwhile, the Park Service, also part of the Department of Agriculture, asks us to "please do not feed the animals" because the animals may grow dependent and not learn to take care of themselves.

Does Washington ever get their priorities straight?

Hi Jim,

Berkshire’s profit declined 30% in the fourth quarter on derivative bets, but Buffett isn’t “bothered by the short-term volatility.”
I thought he once called derivatives “financial weapons of mass destruction”!!

Best regards,
CIGA Black Swan

Berkshire Profit Declines 30% on Derivatives By Andrew Frye and Noah Buhayar – Feb 25, 2012
Berkshire Hathaway Inc. (BRK/A) said fourth- quarter profit fell 30 percent on smaller gains from Warren Buffett’s portfolio of derivatives.
Net income declined to $3.05 billion, or $1,846 a share, from $4.38 billion, or $2,656, a year earlier, Omaha, Nebraska- based Berkshire said today in its annual report.
Buffett, Berkshire’s chairman and chief executive officer, is investing in stocks and acquisitions as operating units generate cash. Derivatives bets, made in prior years on long- term gains in stocks and the solvency of borrowers, produced more than $2 billion of profit in the fourth quarter of 2010.
“These are contracts that don’t expire for another 10 or 15 years and might fluctuate a lot every quarter,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Buffett is “not really bothered by the volatility short term,” said Kass, in an interview before results were released.
More…

 

 

In The News Today

February 28, 2012, at 6:33 pm
by Jim Sinclair 

Jim Sinclair’s Commentary

The liquidity required is QE to infinity squared.

Jim Sinclair’s Commentary

How about these rules? Thou shalt NOT speculate using money that does not belong to you.

In fact thou shalt only clear to earn your living. End of story.

Factbox: Rules for the post-MF Global futures industry 2:18 p.m. CST, February 28, 2012
(Reuters) – Four months after U.S. futures broker MF Global collapsed, roughly $1.6 billion in customer money is still missing, trading volumes are down, and the futures industry is looking for ways to restore confidence.
The U.S. Commodity Futures Trading Commission is due to hold a roundtable in Washington DC on Wednesday and Thursday to discuss how to better protect customer funds. Here are some of the more notable regulatory fixes currently under discussion:
* Make MF Global customers whole: Arguing that the industry will stay flat on its back unless all MF Global customers get every cent of their money back, two new members of the National Futures Association board proposed a novel solution: assess a fee on NFA members, and use the proceeds to secure a loan to cover the shortfall. The NFA is a quasi-regulatory agency funded by the industry and responsible for registering all futures brokers and overseeing some of them. The proposal, first floated in the weeks after MF Global’s October 31 bankruptcy, drew immediate criticism from insiders who said it would create "moral hazard." But the two board members stuck with it, and this month formally asked the NFA board to study the possibility. NFA’s president and chairman both declined to discuss the proposal with Reuters, and it’s unclear whether it will gain traction.
* Neutralize the "Corzine defense": Jon Corzine, the former Goldman Sachs banker who ran MF Global as its CEO until shortly after the bankruptcy, told lawmakers that he was unaware of any large transfers of customer money that could have resulted in the giant shortfall of funds. The NFA is considering a rule that would force the top executives of futures brokerages to sign off on or otherwise take "personal responsibility" for transfers of excess customer funds over a certain set amount, according to NFA’s Dan Driscoll.
More…





Jim Sinclair’s Commentary

Now here is a subprime loan if there ever was one.

US credit-card debt nearing toxic levels By GREGORY BRESIGER
Last Updated: 11:38 AM, February 26, 2012
Posted: 12:55 AM, February 26, 2012
More American households are falling back into the debt hole — this time without the safety net of home values to help bail them out.
Last year, total US consumer debt reached the highest point in a decade, according to a credit-card industry observer.
“Now more than ever, families need to work at saving and paying off any outstanding debts,” says Howard Dvorkin, a CPA and founder of ConsolidatedCredit.org, a credit counseling service.
He says that, after a few months of reducing credit-card debt levels, Americans are starting to return to their reliance on debt.
“People made some progress in reducing card debt earlier in the year, but in the last few months, as the stock market started to rise, they started to return to their old ways of charging things,” Dvorkin says.
In December, the total consumer debt, which is the combination of non-revolving and revolving debt, rose by some 9.3 percent to $2.498 trillion, according to the latest Federal Reserve Board numbers.
More…



Jim Sinclair’s Commentary

Signs of the falling dollar utilization for trade and settlement. This will impact the value of the US dollar in 2012.

Establishment of a Bilateral Local Currency Swap Agreement between the People’s Bank of China and the Central Bank of the Republic of Turkey 2012-02-21 17:29:44
On February 21, 2012, authorized by the State Council, the People’s Bank of China signed with the Central Bank of the Republic of Turkey a bilateral local currency swap agreement in Ankara, for the purpose of promoting bilateral financial cooperation, facilitating bilateral trade and investment, and maintaining regional financial stability. The amount of the agreement is 10 billion yuan or 3 billion Turkish lira. The effective period of the arrangement will be 3 years, and could be extended by agreement between the two parties.
More…

Greece/German Unemployment/Iran/Silver and Gold rise/California

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago

Good evening Ladies and Gentlemen: Gold skyrocketed northbound to the tune of $13.40 as it finished the comex session at $1787.00.  Silver also had a stellar day, finishing the day at $37.14 up $1.64.  This is the first time in quite a while that gold and silver rose big time a day before first day notice.  The bankers try and influence our longs not to take delivery so they generally raid.  

2012 - The Year Of Living Dangerously

...European banks are three times larger than the European sovereigns, the ECB is not the Federal Reserve Bank of the United States, the leading economy in Europe, Germany, is 22% of the economy of America, that there are ever and always consequences for providing free money, that Europe is in a recession and it will be much deeper than thought by many in my view, that the demanded austerity measures are unquestionably worsening the recession and increasing unemployment, that nations become much more self-centered when their economies are contracting and that the more protracted all of this is; the more pronounced Newton’s reaction will be when the pendulum reverses course.

Another Unintended Consequence: $80 Billion 'Gas Price' Tax On Consumption

Although U.S. demand for crude oil has fallen by 1.5 million barrels per day since 2007, anyone spending more than a few minutes on the road, watching TV, or surfing the internet will be more than unpleasantly aware of the rapid rise in gas prices recently. As we noted earlier, following January's record high average gas price, February just surpassed its own record and TrimTabs quantifies the impact of this implicit tax on consumption, noting three key factors that will remain supportive of high oil prices: Central Bank liquidity provision (ZIRP), political tensions, and implicit USD devaluation. Critically, around 70% of the benefits of the payroll tax extension has already been removed thanks to 60-80c rise in gas prices nationwide whose growth has far outstripped wage and salary growth in recent years. As Madeline Schnapp points out, while the latest round of oil speculation is likely to end with a pop, the erosion of purchasing power from high energy prices is here to stay. Bottom Line: Rapidly Rising Fuel Prices Put Sluggish Economic Growth at Risk.

Michigan, Arizona GOP Primary: Poll Coverage And Webcast

The seemingly endless GOP primary goes through the states of Michigan and Arizona tonight, where Romney and Santorum are the key competitors, while Gingrich and Paul focus elsewhere. BBC reports: "Both men have been campaigning intensively over the past few days. Pre-primary polls gave Mr Romney a marginal lead in Michigan, and a stronger advantage in Arizona. Analysts say a victory in his home state of Michigan is key for Mr Romney. He has long been seen as the front-runner and favourite for the nomination - and currently leads the race for delegates - but has struggled to win over a strong majority of conservative Republican voters. Most polls will close in Michigan at 20:00 EST (01:00 GMT), where 30 delegates are at stake. Delegates will be awarded to candidates in each congressional district, with two at-large delegates also awarded. In Arizona, where polls will close at 19:00 local time (02:00 GMT), 29 delegates will be awarded to the winner of the state's primary."

Guest Post: Is Housing An Attractive Investment?

In a previous report, Headwinds for Housing, I examined structural reasons why the much-anticipated recovery in housing valuations and sales has failed to materialize. In Searching for the Bottom in Home Prices, I addressed the Washington and Federal Reserve policies that have attempted to boost the housing market. In this third series, let’s explore this question: is housing now an attractive investment?  At least some people think so, as investors are accounting for around 25% of recent home sales. Superficially, housing looks potentially attractive as an investment. Mortgage rates are at historic lows, prices have declined about one-third from the bubble top (and even more in some markets), and alternative investments, such as Treasury bonds, are paying such low returns that when inflation is factored in, they're essentially negative. On the “not so fast” side of the ledger, there is a bulge of distressed inventory still working its way through the “hose” of the marketplace, as owners are withholding foreclosed and underwater homes from the market in hopes of higher prices ahead. The uncertainties of the MERS/robosigning Foreclosuregate mortgage issues offer a very real impediment to the market discovering price and risk. And massive Federal intervention to prop up demand with cheap mortgages and low down payments has introduced another uncertainty: What happens to prices if this unprecedented intervention ever declines? Last, the obvious correlation between housing and the economy remains an open question: Is the economy recovering robustly enough to boost demand for housing, or is it still wallowing in a low-growth environment that isn’t particularly positive for housing?

Goldman Reports Receipt Of Another SEC Wells Notice On February 24

Looks like the SEC is not done with Goldman Sachs, already the subject of the largest civil fine levied by the SEC on a Wall Street firm, aside for that whole Robosettlement farce of course - which still is not available to the general public, and is back for more wristslaps. Per Reuters: "The U.S. Securities and Exchange Commission notified Goldman Sachs Group Inc that it may file a civil case against the bank related to a $1.3 billion offering of subprime mortgage securities, Goldman said in a regulatory filing on Tuesday. Goldman received the "Wells notice" on Feb. 24 related to the bond deal, which was underwritten by Goldman in 2006, according to the 10-K filing. A Wells notice indicates that SEC staff plans to recommend that the Commission take legal action, and gives a recipient a chance to mount a defense. The bank said it will be making a submission to SEC staff "and intends to engage in a dialogue" with them to address their concerns." Our only question is how will Goldman pin this one entirely on Fabrice Tourre who may or may not be still in the employ of the 200 West headquartered firm.

Silver Explodes As DJIA Closes Above 13,000

After 22 crosses yesterday, and 12 more today, the Dow managed to close above 13000. Transports were lower but less so on Oil's modest retracement (though the Brent-WTI spread remained around $15). While stocks closed modestly higher, volatility and correlation markets remained considerably higher than would be expected and along with quite considerable relative weakness in HYG (the high yield bond ETF) into the close as well as a clear up-in-quality rotation was evident as investment grade credit outperformed notably (not exactly a high-beta risk-on shift). Apple's meteoric rise helped drag Tech to first place overall today and also YTD followed closely (YTD) by financials both up around 14%. The last week or so of slow bleed higher in stocks has notably not been led by a short-squeeze in general - based on our index of most shorted names - but as is becoming more and more clear, divergences (and canaries) are appearing all over the place but we suspect can be traced back to Apple in many cases for its over-weighting impact. Treasuries slid lower (higher in yield) after Europe's close but remain better on the week and modestly flatter across the curve. Aside from a hiccup around the macro data this morning, EUR pushed higher all day against the USD shifting into the green by the US close as JPY stabilized. The USD weakness helped Copper and Gold leak higher but Silver was the massive winner, now up an impressive 4.3% since Friday and 30% YTD as WTI lost $107 and is now down over 3% on the week. The IG rotation coupled with vol decompression makes some (nervous) sense heading into the LTRO results but it seems the new safe-haven trade is Apple (whose option prices are now the most complacent since early 2009).

US Weighing Usage Of Strategic Petroleum Reserve

Last week we joked that for every downtick in the Obama popularity rating (due to record February gas prices) we would see at least 1 million barrels released from the Strategic Petroleum Reserve. Sure enough, humor promptly becomes reality in United Banana States of Amerika:

• CHU SAYS U.S. WEIGHS USING STRATEGIC PETROLEUM RESERVE
• CHU SAYS U.S. IS `VERY CONCERNED' ABOUT EVENTS IN IRAN

So following the Transcanada fiasco, China is now doubly delighted that it will be able to buy even more cheap crude at America's expense. And yet one wonders why the SPR release: after all didn't we learn just today that Americans have not been more confident in years?

Average February Gas Price At All Time High; Follows Record January Gasoline Costs

Since everyone is buying everything that is not nailed down, preferably with both hands, on massive margin if possible, and since the global reflation trade is on full bore following trillions in cheap money dumped by central banks to prevent another re-recession within the broader Depressionary downtrend (offset for the time being only courtesy of $7 trillion in consolidated central bank funny money), it only makes sense that following record January gasoline prices, that February would see an all time high in gas as well (a detailed breakdown can be found at the AAA's website). But fear not: as the laws of supply and demand have also been usurped by the Fed, as has common sense and basic economics, both these data points indicate that Q1 GDP will also come at an all time high, because the entire economy is now purely a reflection of Apple, which as noted previously is almost bigger than the entire retail sector by market cap, and today hit an all time high as well. In fact, we are now seeing a record in new all time highs across the spectrum (if not volume - shhhh about volume), it means that even as IBM just laid off another 1,000 North American employees, that the economy has never been better either.

ISDA To Hold First Greek Default Determination Hearing On March 1

For a while there it seemed that together with the LTRO and the Bernanke testimony, tomorrow's event trifecta would be joined by ISDA, which it had previously been rumored would make a decision on whether a credit event (read CDS trigger) had occurred in the context of Greece, and specifically following the ECB's stripping of its own bonds under some arcane exchange offer that only the ECB was privy to (this is not a determination whether a credit event has taken place related to the PSI - that will take place in late March). According to a just released PR, this won't happen, and instead ISDA will hold the meeting at 11 GMT on Thursday, March 1, the day after the LTRO, and announce everything was voluntary and by the books, just to avoid overloading the algos with bullish news at the same time (recall that the LTRO announcement will take place at 11:15 CET). In this way, the upside love will be spread over two days, which should hopefully result in another 30 ES point, as the headline scanning aglos no longer care what the headlines actually say, as long as there are headlines. Remember: when dealing with a bipolar Atari 2600 - quantity trumps quality any time, especially when coming off the biggest short-term central bank liquidity infusion in markets in history.

New York Fed Buys Building Housing Plunge Protection Team

Since nobody else has any interest in downtown NY real estate, Goldman's Bill Dudley, currently incidentally in charge of the New York Fed, has decided to step up. "The Federal Reserve Bank of New York (New York Fed) today announced that it has acquired the building at 33 Maiden Lane for $207.5 million from Merit US Real Estate Fund III, L.P. and established a new, wholly owned limited liability company called Maiden & Nassau LLC to serve as owner of the building. The acquisition provides a cost-effective, long-term alternative to the current practice of leasing space in this and other buildings and allows for greater control over maintenance, operation and security of the building." As a reminder, the 9th floor of 33 Liberty is where the ever elusive, but always present Plunge Protection Team, pardon the "markets group" at the Federal Reserve is housed (more here). And although in recent days it is no secret that the bulk of Fed open market stock order are routed via that one certain HFT powerhouse out of Chicago, it is always a good idea to keep all the market manipulating facilities under one roof. And so, the Fed now will have full domain over everything that transpires under its own roof. And since the building likely has an extended basement, it provides Dudley, and his muppet Ben Bernanke with a convenient location where to store the soon to be confiscated 107 tons of Greek gold.

Pension Reform Unintended Consequence: The Pentagon Is Broke

New standards that were set in place in 2006 as part of the Pensions Protection Act that change rules on pension fund liability calculations looks set to push The Pentagon to budget DefCon 1 as they note the costs are "way more than a book-keeping question". As Defense News reports, the rule, which takes effect this week, requires the US government to reimburse its contractors to a far greater degree for their employee pension costs. The unbudgeted line-item is estimated at billions of dollars but perhaps what is most concerning is DoD Comptroller Hale's comment that the cost to The Pentagon will depend on how the companies' pension funds fare in the stock market. If investments do well, costs will be lower, but if investments do poorly, pension funds become further underfunded and this will mean more costs to the Pentagon. Yet more vested interest in the economy stock market's levitation but given the 2006 law change, we tend to agree with the Center for Strategic and International Studies who note: "How can this have snuck up on us and caught us unaware? I didn't hear any alarm bells!" How indeed? Maybe Dow 13k is even more important than we know?

"It Ain't Over Till It's Over": Empirical Observations On Who The Next Occupant Of The White House May Be And Why

It is appropriate that as a post-mortem to tonight's GOP primary, which according to initial reports has Romney as winning both Michigan and Arizona, we have ConvergEx' Nick Colas providing an extensive summary of the factors in favor and against both the presidential incumbent, and the challenger, and in doing so handicap the possibility of election victory for either Obama or the Republican candidate, whoever he may end up being. As Colas says, 'it ain't over till it's over' - "As the battle for the 2012 Presidential election begins to pick up speed, we read a flood of reports that President Obama is a lock for reelection. And just as many that he is destined to be a one-termer. Those who believe that the winner of the 2012 election will be Republican claim that the keys to Obama’s downfall will be unemployment, skyrocketing oil prices, and increased federal spending. However, according to historical data and some political science theory, it looks like Obama has a pretty good chance of staying in the White House.... The GOP isn’t out of the race yet, but it’s up against some strong historical opposition." And while we would agree that all else equal Obama likely is a shoo-in, never before will there have been a full blown debt ceiling crisis in a repeat of August 2011 in the weeks and months leading into the election - that factor alone, in our humble opinion, could end up being the swing variable that pulls the otherwise ironclad victory away from Obama's clutch, and explains why the GOP caved so quickly on the payroll tax extension which will add $100 billion in debt, and force a debt ceiling breach ahead of November, as was first predicted on Zero Hedge. That, of course, and runaway oil: should crude continue its relentless surge, which it will if QE3 occurs, or an invasion or Iran becomes reality, Obama can kiss another 4 years goodbye.

Another Unintended Consequence: $80 Billion 'Gas Price' Tax On Consumption

Although U.S. demand for crude oil has fallen by 1.5 million barrels per day since 2007, anyone spending more than a few minutes on the road, watching TV, or surfing the internet will be more than unpleasantly aware of the rapid rise in gas prices recently. As we noted earlier, following January's record high average gas price, February just surpassed its own record and TrimTabs quantifies the impact of this implicit tax on consumption, noting three key factors that will remain supportive of high oil prices: Central Bank liquidity provision (ZIRP), political tensions, and implicit USD devaluation. Critically, around 70% of the benefits of the payroll tax extension has already been removed thanks to 60-80c rise in gas prices nationwide whose growth has far outstripped wage and salary growth in recent years. As Madeline Schnapp points out, while the latest round of oil speculation is likely to end with a pop, the erosion of purchasing power from high energy prices is here to stay. Bottom Line: Rapidly Rising Fuel Prices Put Sluggish Economic Growth at Risk.




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Paulson Said to Tell Clients Gold Fund Will Top Others

by Kelly Bit, Bloomberg.com:
John Paulson, the hedge fund manager seeking to rebound from record losses in 2011, told investors his Gold Fund will outperform his other strategies over five years, according to a person with knowledge of the matter.
The billionaire, at a meeting yesterday at the Metropolitan Club in New York, said the metal is the best hedge against currency debasement as countries inject money into their economies, said the person, who attended the event and asked not to be named because the information is private. Paulson also cited gold as a hedge against the euro currency, as a breakup may occur, and an eventual increase in inflation.
The manager told clients his own money comprises 55 percent of the Gold Fund’s $1.2 billion in assets, the person said. The fund, which can buy derivatives and other gold-related securities, declined 11 percent last year after the metal slumped 14 percent in the final four months.
Read More @ Bloomberg.com

Iran Moves Further To End Petrodollar, Announces Will Accept Payment In Gold Instead Of Dollars

Much has been spun in recent weeks to indicate that as a result of collapsing trade, Iran's economy is in shambles and that the financial embargo hoisted upon the country by the insolvent, pardon, developed world is working. We had a totally different perspective on things "A Very Different Take On The "Iran Barters Gold For Food" Story" in which we essentially said that Iran, with the complicity of major trading partners like China, India and Russia is preparing to phase out the petrodollar: a move which would be impossible if key bilateral trade partners would not agree to it. Gradually it appears this is increasingly the case following a just released Reuters report that "Iran will take payment from its trading partners in gold instead of dollars, the Iranian state news agency IRNA quoted the central bank governor as saying on Tuesday."

Israel To Keep US In The Dark Before Launching Pre-emptive Iran Attack

It had been a quiet week in terms of geopolitical developments out of Middle East. Too quiet, well aside for that whole US escalating once again bit, and forcing Iran to eventually go over the edge. And while the role of the US and Iran has been extensively digested in the past few weeks, it is Iran that has remained in the shadows recently. No longer: as Al Arabiya reports, "Israeli officials say they won’t warn the U.S. if they decide to launch a pre-emptive strike against Iranian nuclear facilities, according to one U.S. intelligence official familiar with the discussions. The pronouncement, delivered in a series of private, top-level conversations, sets a tense tone ahead of meetings in the coming days at the White House and Capitol Hill. Israeli Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak delivered the message to a series of top-level U.S. visitors to the country, including the chairman of the Joint Chiefs of Staff, the White House national security adviser and the director of national intelligence, and top U.S. lawmakers, all trying to close the trust gap between Israel and the U.S. over how to deal with Iran's nuclear ambitions, according to The Associated Press." Needless to say, the thoroughly effete and comical US foreign policy has no response to follow up queries: "The White House did not respond to requests for comment, and the Pentagon and Office of Director of National Intelligence declined to comment, as did the Israeli Embassy." And while there may be no comments here, look for more warnings about Israeli citizens being targetted by deranged Iranian around the world. Because when all else fails, fearmonger. Next up: the Status Quo will be telling the world how not attacking Iran would be tantamount to global destruction. The only trade off - will the spike in crude to $150 outdo the surge in Obama's popularity rating as the Nobel Peace Prize winner puts his name in the hat for a nomination in the Nobel War Prize category as well.

Drudge “Primary” Open – Cast Your Vote Now!!

Friends of the Republic, cast your vote NOW at Drudge Report, for the one candidate who stands for the Constitution. Sadly, with more than 43,000 votes cast so far, Ron Paul is currently running third.
MITT ROMNEY 35.01% (15,106 votes)
RICK SANTORUM 28.53% (12,310 votes)
RON PAUL 24.29% (10,478 votes)
NEWT GINGRICH 12.17% (5,250 votes)

iBubble: Apple's Market Cap Is Now The Same As The Entire Retail Sector, Bigger Than All The Semis

This is simply stunning: one company, which has two flagship products, has a bigger market cap than the entire Semiconductor space, and is just shy of the entire S&P Retail sector.

Gold Should Be $2100-$2200 RIGHT NOW – Jim Puplava

 

Broken Market: Short Muni ETF Flash Smash +43%

Presented with little comment except absolute incredulity that this is still occurring day-in and day-out with no real discussion beyond our friends at ITG...
*SHORT MUNI ETF PAUSED BY CIRCUIT BREAKER ON RISE OF UP TO 43%
SMB just jumped 43% in seconds on a string of 100/200 lot trades cascading up and then disappearing as circuit breakers halted it.

The Final LTRO Preview - Bottoms Up

There is broad disagreement among European banks on whether they should (and whether they will) choose to access the LTRO. We have discussed the top-down perspective and the very granular bank-by-bank perspective, and we end with a more bottoms-up perspective on the bank's own views of the LTRO. As SocGen notes, the investment banks (and certain Swedish banks) are very skeptical (and rightly so given the 'LTRO Stigma') while the Italian and Spanish are open to taking whatever they can, whenever they can (is that really a good sign?). Bank management must weigh the transparency they will face at the end of the quarter when sovereign bond holdings are exposed and just as SocGen points out, banks with considerably higher exposure (implicitly through the carry trade) may well face much more negative market action (even if Basel III doesn't handicap that risk). As with LTRO 1, the ECB will only reveal aggregate data, leaving the individual banks themselves to reveal their own take-up - we suspect the investment banks will make a point of highlighting that they did not take the funds, while the Portuguese, Italian, and Spanish banks will promote the benefits of their government-reach-around self-immolating ECB life-line.

Are US Corporations Immune from Prosecution For Rape, Torture, Murder, and even Genocide?

more »

 

 

Biderman: Real Time Economic Data Shows No Recovery, US Dollar Is a 'Phantom.'

more »

 

 

Discipline or Emotion - Vision or Blindness?

Eric De Groot at Eric De Groot - 2 hours ago

Emotions blind us from the obvious and force us to act hastily well after the fact. Watch for breakout on a sign of strength in grains. iPath Grains ETN (JJG): Spot Commodity Prices: CRB Spot Index (1947 - Present); 16-Raw Industrial Spot Price (1935-1947); Great Britain Wholesale Price of All Commodities (1885-1935) and Trend Z Scores Special Donation To Insights Contribute to... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

All Boats Rising?

Trader Dan at Trader Dan's Market Views - 3 hours ago

Take a look at the following set of charts and see if it leaves you as confused as I am. First the broader stock market as indicated by the S&P 500: Now comes the commodity complex as illustrated by the Continuous Commodity Index: Lastly comes a chart of the US long bond: The rising stock market is supposedly the outcome of an improving economy, or so we are assured by all the experts. The economic recovery is evidently proceeding "so well" that the S&P 500 just made a brand new 52 week high in today's session and is now amazingly back at the exact same level it was prior to... more » 

 

 

Guest Post:The Existential Financial Problem Of Our Time

The modern, debt-based economy requires constant economic expansion if only to service all that debt. So what happens when the modern economy goes ex-growth and stops expanding? Iceland already found out. Greece is in the process of discovering. But we will all get a chance to participate in this lesson. Runaway fiscal and monetary stimulus throughout the western economies is in the process of destroying the concept of creditworthiness at the centre of the modern monetary system.  Private investors, we suspect, have little or no conception of the extent to which the state is now the predominant player in the financial markets. Central banks control the money supply and interest rates. Central banking and commercial banking interests have essentially become fused. The ECB's long-term refinancing operations are banking bailouts by the back door. Central banks are now also the swing players in government bond markets which directly influences the price for corporate credit. Central bank monetary stimulus also directly influences equity market direction and confidence. Be careful, be very careful about the sort of government debt you hold. You may well end up being paid in whole- but in such depreciated terms that being "kept whole" will be meaningless in real terms.

Phantom Gold And Deconstructing PollyAnna

Many want to believe that a stock market that has doubled from the March 2009 low (or added $9tn in market cap) has to mean that the US economy is in a healthy long-term recovery. Unfortunately, as Charles Biderman of TrimTabs explains, the PollyAnnas are wrong. The sentiment, built on the three pillars of an improved labor market, higher corporate earnings, and the return of the housing market, are all based upon misleading data. Starting from the position of discovering where the new money is coming from, the Bay Area Beau dismantles each of the pillars one by one and ends by noting that it is not Gold, which has outpaced stock market gains, that is a phantom currency but the USD.

Citi Previews The Bernank's Testimony To Congress Tomorrow

For a February 29, tomorrow will be even more remarkable, because while all eyes will be on the LTRO, just waiting for their chance to start fading the expansion of the ECB's balance sheet (which will hit a record €3 trillion+ as of market close tomorrow, or well higher than the Fed's $3 billion), some may be forgetting that across the pond, our own Bernanke will be holding the first of his biannual Humphrey Hawkins presentations to Congress hours after the LTRO news has printed. Expectations are high that despite $2 trillion in liquidity flooding capital markets in the past 6 months, that Bernanke will not dare to remove the punchbowl. Here is Citi's Steven Englander with a preview of what (not) to expect.

Unsuccessful Irish Referendum Would Prevent A Future ESM-Funded Bailout

While the now scheduled Irish referendum on the fiscal treaty, which will likely not pass successfully absent major concessions on behalf of Europe, will not precipitate a failure of the recently agree upon compact, as 12 out of the 17 contracting parties need to support the Eurozone, it will have an impact in that it would impact future bailouts of Ireland courtesy of preset European bailout mechanisms. In other words, should things take a turn for the worse, and they will, in the near future, Ireland will have to rely on itself to save itself. As a reminder, it took Europe 2 years to (supposedly) firewall itself from default and a collapse of its banks. How long will the same take for Ireland, because while the country may be standalone, its banks most certainly will not be. Remember that money is fungible. So are massive unrecognized Mark to Market losses. Morgan Stanley explains.

Dr. Paul Craig Roberts: US Military Complex Gets Rich Off Of Afghanistan

The US is famous for going to other countries with goals ranging from retaliation to installing democracy to stopping a civil war. And quite often the US Government and the military alike are surprised at what they find: that people in those countries don’t want them there and, in many cases, will risk or sacrifice their lives to make sure they leave. We’re seeing a new low point in America’s longest war, unfolding as we speak. Riots in Afghanistan, as citizens there protest the burning of Korans by US military personnel at Bagram airbase. Some American soldiers have been killed and many more Afghan citizens are dying as well. And there’s beginning to be a sense that the battle to win the hearts and minds there is simply impossible. Paul Craig Roberts, former official with the Reagan administration, speaks to RT’s Kristine Frazao about what happens if things don’t change dramatically.

Global “Oil Shock” Could Sink Obama’s Re-Election Bid

by Gary Dorsch, GoldSeek.com:
As the price of North Sea Brent crude oil touched $125 /barrel last week, the topic of sharply higher gasoline prices suddenly caught the attention of the Main Stream Media (MSM). Spin artists for the re-election campaign of President Barack Obama were quick to deny any responsibility for soaring oil prices, and instead blamed the upward spiral on geo-political tension with Iran. However, since the days of the Yom Kippur War in October 1973, – when the OPEC cartel placed an embargo on crude oil sales and hiked oil prices by 70%, the price of gasoline has been a key variable effecting the outcome of US-presidential elections.
Read More @ GoldSeek.com




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