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Hope you guys are holding up ok in this maelstrom. I've been out and watching from the sidelines for awhile and haven't been around here much.
Some day it'll be the right time to move back in. Hope it's soon. And hope to find you here when it happens.
Keeping my eyes peeled for that special moment and I'll be here raving about it when I think I see it.
Till then, hang in there and best of luck to all of ya.
Steve
I doubt we've even seen the tip of the iceberg yet VIP. This "rot" has been allowed to fester for a long long time and I'm pretty sure it's deeply embedded in vitually every nook and cranny of this system.
It'll take as long to irradicate it.
It makes me sick sometimes reading these articles
==============
CORRECTED - SEC charges E*Trade, 5 others, for front running
12:28 PM ET 3/5/09 | Reuters
* Traded ahead of customers between 1999 and 2005
* E*Trade to pay $34 million
* Six firms to pay total of $42 million (Corrects figure in bullet point and 1st paragraph to $34 mln from $40 mln)
NEW YORK, March 5 (Reuters) - Online broker E*Trade Financial Corp (ETFC) will pay nearly $34 million after U.S. regulators ruled its unit was among six firms that improperly executed trades ahead of customer orders, known as front running, between 1999 and 2005.
The unit, E*Trade Capital Markets LLC, and five other firms, "failed to meet their basic obligation as specialists to serve public customer orders over their own proprietary interests while executing trades" on the Chicago Stock Exchange, the Securities and Exchange Commission said late on Wednesday.
The five other firms that were served the civil injunction were: Automated Trading Desk Specialists LLC, Melvin Securities LLC, Melvin & Company LLC, Sydan LP, and TradeLink LLC. The six firms agreed to pay $42 million in total, the SEC said.
E*Trade, which has suffered a string of quarterly losses due to its deteriorating mortgage business, said in an SEC filing it "neither admitted nor denied the allegations," but would pay the $28.3 million charge and another $5.7 million civil penalty. (Reporting by Jonathan Spicer, Editing by Maureen Bavdek)
Just in case you guys aren't avid fans of Jon Stewart as I am and you might not have seen this comedy clip about CNBC, I offer you this 3rd party commentary and Stewart's hysterically funny and painfully TRUE assesment of CNBC's "money honey's" and "frat boys"(video clip).
http://www.marketwatch.com/news/story/cnbc-easy-target-jon-stewarts/story.aspx?guid=%7BEAB2CEB9%2D0F7A%2D444A%2DB131%2D4821D7C59315%7D&dist=TNMostRead
Better read this!>>>> Finally,...FINALLY...the REAL STORY is about to go public.
This is the story that's going to make all the previous stories look like a walk in the park.
The $700 TRILLION 'elephant in the room' is being contemplated...the first time the word "QUADRILLION" is being used.....and why DOW 4000 may look good pretty soon.
http://www.marketwatch.com/news/story/The-700-trillion-elephant-room/story.aspx?guid=%7B024DB809%2D8506%2D4AA9%2D83BB%2DB053FD4E1C11%7D
LOL, my son and was watching CNBC and he said, "Daddy, they mispell- Down, they spell it D O W"!!!
Indeed, such unchartered waters, that no one has dipped their toes in before.
Who knows what decisions will be best?
The finale could be very interesting with Stock slumping and metal are retracing FAST! It almost as if people are playing currency and commodities side by side.
Congrats on the new piano! That'll come as a welcome distraction from all the destruction I bet. And you paid it forward too.
You're a good man Charlie Brown. :D
As for the silver/gold sell off....I think you nailed it. I've heard the talking heads saying the same thing.
Make some music musicman. Music to soothe the savage breast. We could all use some of that.
I get the sneaking suspicion that precious metals are selling off again to raise capital to meet margins calls or to preserve cash...
Got my new piano today. Stoked!
Kid who got my old piano was very happy too...
USD looks to be breaking out to the upside for the morning judging by it's current price at midnight...
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=DXY&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=7&freq=1&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=0&ma=2&maval=35&lf=16&lf2=32&lf3=0&type=4&size=2&optstyle=1013
and the index futures are down pretty hard for tomorrow. Down 100 pts right now at midnight.
http://www.bloomberg.com/markets/stocks/futures.html
Reaching critical mass now as to the support/resistance levels on the indices and the USD. Won't be long before we get the market's decision on the next level.
Batton down the hatches.
Some pretty high up folks already figure we're already in a depression that's just beginning.
The dollar is acting counterintutively in this situation because this situation is not like a normal cyclical recession that ebbs and flows with supply and demand imbalances.
This is what I'm now calling a "systemic recession" where the entire structure of the system is failing. It's really just another word for depression when you think about it.
In this particular case, and unlike the other depression, we're in a truly global economy and the dollar is only holding up because it's the "least bad" fiat currency, and still holds most peoples trust. Again, only relative to other currencies.
It's the "last bastion" of fiat currency. And you're right that if the good ole' USD loses it's psychological value, THEN....watch precious metals(mostly gold unfortunately, but hopefully silver too)skyrocket.
Sadly, that'll not be much solace compared to the misery and danger that's likely abound in a global depression.
Bullets, canned food and toilet paper will probably be more in demand than little pieces of shiny metal.
It's probably gonna be a rougher ride than almost anybody is yet prepared for. I hope I'm wrong.
I kinda figured it right then; they have sophisticated techniques to get an edge, percentage-wise on moves. And likely that program continues as the moves do, and they get the most they can out of the position moves, before the trading stalls.
Interesting, thanks for sharing. A lot of traders and economic talking heads think like we have for a while. That this a real tough situation at hand, and, will continue for a good piece of time.
Not that I want to see people get hurt in any way, it just appears there are going to be rough edges globally when it gets really tough. And they are saying the global economy which we dragged down, will now start to drag us down some more. So odd that with all the fiat currency we are printing, that the dollar still holding up. If it ever has a serious dip, the precious metals must shine.
Sensible people everywhere are simply pulling in their horns and hunkering down and keeping on keeping on with work and family as best they can...GLTA mesays...
Everything is at critical levels right now, including the DOW, the USD, the VIX etc.
We're at a super, mega, humongous inflexion point at this moment and it looks to me like the mantra has been and still is...sell into any rallies.
As far as skimming by the sharks...On Fast Money (CNBC) one of the "sharks" revealed a little secret on how his trading desk operates.
They use a sophisticated computer program that watches literally every trade and calculates (based on a mathematical formula) the levels of buying and selling "pressure" in all stocks and futures options based on how many trades go off at the bid or ask and levels in between to detect institutional buying/selling so that they can get in front of any moves.
Computer trading accounts for something like 90% of all trading that happens now. It's hard out there for a little pimp like you and me. LOL
Interesting post by lemmy over on the Seasonality Stock Reports board, mirroring somewhat your thoughts.
I am wondering if, with all that volume Friday, (3.5 billion shares) if in fact the sharks (hedge fund players) work on skimming percentages as they study buying pressure during the day on certain stocks?
Post 44802 over there in case this link doesn't work.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35951062
I just realized that this is not only the day of a daily and weekly close, it's the monthly close too. Talk about a convergence of forces!
3 closes, at a MAJOR inflexion point.
Don't rule out the possibility of a huge rally starting Monday based on the technical fibonacci, a new day, week And month. IT COULD HAPPEN.
Or...6K, 5K,...4K????
A few hundred Perp Walks might reinstill confidence. LOL
Nice article. Too bad I won't be alive to take advantage of it. It's almost here.
This one was just about 100 miles from us here. I give it another 3 weeks tops before the BIG ONE hits the San Juan subduction fault for a 9+ monster quake.
:/
Gulp!
Thursday, February 26, 2009 11:18 AM PST
Your Keyword News Alert for [EARTHQUAKE PACIFIC]
matched the following stories:
The Oregonian, Thu, 26 Feb 2009 10:00 AM PST
"Light earthquake" shakes Southern Oregon http://www.oregonlive.com/news/index.ssf/2009/02/light_earthquake_shakes_southe.html
A magnitude 4.1 earthquake has been recorded beneath a mountainous area 25 miles south-southeast of the Coos County town of Powers. The Pacific Northwest Seismograph Network at the University of Washington in Seattle said the quake happened about 2 a.m....
Watch for 50% fibonacci bounce/reversal at 1/2 the highest closing price for the DOW.
You can use either the weekly or daily close. I prefer to us the lower of the two in this case.
The highest Daily close was 14,164 and the highest Weekly close was 14,093.
50% Fibonacci retracement numbers...(Daily-7,082 or Weekly-7,047)
And tomorrow will be both a daily and a weekly close!
D-Day is upon us boyz! R U Ready?
Interesting that we closed today at EXACTLY 100 points above 50% fibonacci for the highest daily close. To say that Tomorrow's close will be VERY TELLING, is to make one huge understatement!
Be there or be square! LOL
And remember...it's the close that matters. Not the Intraday. That's important if you use this technical model.
Good luck everybody, and God save the King!
Chart from that time period below...
http://finance.yahoo.com/echarts?s=%5EDJI#chart9:symbol=^dji;range=20070926,20071026;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=0;logscale=on;source=undefined
Watch for 50% fibonacci bounce/reversal at 1/2 the highest closing price for the DOW.
You can use either the weekly or daily close. I prefer to us the lower of the two in this case.
The highest Daily close was 14,164 and the highest Weekly close was 14,093.(7,082 or 7,047) If those don't hold...????
Interesting that we closed today at EXACTLY 100 point above one of those.???
And remember...it's the close that matters. Not the Intraday. That's important if you use this technical model.
Chart from that time period...
http://finance.yahoo.com/echarts?s=%5EDJI#chart9:symbol=^dji;range=20070926,20071026;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=0;logscale=on;source=undefined
The Next Economic Bubble To Burst? Take Your Pick
The next economic bubble is on its way—if it's not already here, analysts believe. The problem is, there's no clear consensus on what it will be or when it will hit. But there is a feeling that another crisis is about to burst.
And as analysts debate over which bubble will break, they also differ on the impact it will have on the economy.
"Bubbles are neither good nor bad," says Ed Greback, Chief Executive Officer for Tempus Advisors. "They are simply a normal market reaction to freely available funding or lack thereof."
"We can't stop bubbles. It is human nature to keep creating boom and bust cycles," says Matthew Tuttle, financial author and money manager. "We have been going through this throughout history and will continue to do so."
And if bubbles can't be stopped, they present opportunities for some.
"A bubble is good when you can identify it," says Tuttle. "If you had identified the bubble in oil and commodities in early 2008 you could have made a lot of money. The key is to follow an approach that seeks to identify when a bubble might be forming."
But if some see opportunities, others see pain.
"To have a bubble is to have increased volatility," says Steve Wallman, CEO of Foliofn and a former SEC commissioner from 1994 to 1997. "If you get a return of 10 percent over ten years, that would be attractive. But in some time frame it will have a minus 40 percent return, then a 60 percent. That's pretty risky."
Slideshow: Origins of the Financial Crisis "Then and Now"
And as for stopping or containing a bubble, Wallman says government can play a role in but seldom does.
"It's leadership," says Wallman. "Government has to take on industries that say 'leave us alone.'"
Here's a look at some of the trouble spots the experts see coming:
Treasury bonds: "The next bubble could be in Treasurys," says Timothy Canova, professor of International Economic Law at Chapman University in Orange, California. "Yields are near zero on short term and quite low on long term government securities," says Canova. "America remains dependent on huge inflows of foreign capital to finance debt ... if foreign capital inflows were to slow even a little, there could be a sudden drop in Treasuries and dollar-dominated assets."
And Treasurys face a bleak future dues to stimulus plans according to John Grether, Academic Dean of Law and Economics at Northwood University in Michigan. "Government's around the world will roll over record short term debt this year and will flood the market with new issues to finance their stimulus plans," says Grether. "In that case, there will be more bonds out there than a skittish market will be willing to buy."
Commercial Real Estate: "The next financial tsunami to hit will be the widespread failure of shopping center mortgages," says Peter Monroe, co-chair of REOMAC, a not for profit trade association. "Half a trillion dollars of commercial loans financed on historically low rates, are due for refinancing in the next three years," says Monroe. "The negative impact of these shopping center mortgages is enormous."
Health Care Technology: "Continued spending on health care technology with a lack of improvement in care is driving an unsustainable cycle," says Dr. Winifred Hayes, president and CEO of Hayes Inc, an independent health technology research and consulting firm. "The same dynamic and meltdown that hit the tech, real estate and finance industries is happening in health care."
Student Loans/credit cards: "Two out of three college students graduate with debt and those who graduate from public schools owe $17,250 in student loans," says Scott Crawford, personal finance expert and CEO/Founder of DebtGoal.com. "Ten years ago it was only $8,000. Add the student credit card debt and this has the potential to collapse on itself."
The irony here is that as governments try to fix one bubble, they can create conditions for a bubble somewhere else, be it in Treasurys, gold, or commodities.
"The problem with bubbles is that they distort the allocation of resources," says DebtGoal.com's Crawford. "We had too many resources in housing contraction, consumer lending and retail. I think the lesson learned here is all these areas will still suffer for a while."
"What a bubble does is allow you to reach a far extreme," says Wallman. "Something might blossom. It's sort of an evolutionary theory of the economy. But boy, what a cost."
© 2009 CNBC.com
excellent .... and thank you
Article: The 5 'M's for picking gold stocks. FWIW.
http://news.goldseek.com/GoldSeek/1235404800.php
NGD is another one that's been looking good
I'll guess at $1400 to $1500 by end of year.
A miner, EGO, that looks to be moving on up.
Also check out AUY, RGLD, IVN.
looks like we are heading for 5000 on the DOW. Will Gold be at $2000/oz next year?
I have an electric bass student right now and found a book on bass that shows the elemental bass line for many different styles, so have been working on that, which came with a play along CD.
Funny, the guy who wrote the book, when I Googled him, has a page on Facebook.
I'm not on there, however. Have had 141,158 hits on my piano lessons for boogie/rock/blues on youtube, with 239 subscribers.
Noticed all the ads in the paper and on radio & TV for old gold they want to buy, or coins they want to sell? Sign of the times.
Some profit taking today in the precious metals.
USD (DXY) is below 86 at the moment (12 midnight PDT) and silver is holding relatively steady.
DOW and NASD futures are up nicely as expected with the dollar down.
I think we're gonna' get a pop here.
Hope you had a good weekend. I spent my time getting up to speed with my friends on Mafia Wars on Facebook. LOL
They're addicted to it and now so am I me thinks.
Are you a Facebook(er)? Interesting place/concept. Growing like wildfire.
USD at what is being tested as a double top. Could be the turning point for stocks. Maybe...!
USD index(DXY) needs to break above 88.70ish and hold to continue it's uptrend and continue the downtrend in stocks. Conversely, it needs to break 86.00ish and hold to begin confirming the double top and the new downtrend.
I also believe that if it decides to drop and break out to the downside that precious metals will accelerate to the upside, although it's going up nicely in tandem with the recent rise in the DOLLAR INDEX anyway in anticipation of hyper-inflation in the future.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=27785873
Really good article that covers a lot of what we've been discussing about deflation, inflation, ect:
What Do Gold-to-Oil and Gold-to-Silver Ratios Say?
http://seekingalpha.com/article/121134-what-do-gold-to-oil-and-gold-to-silver-ratios-say
Good points, both posts.
I agree that if silver begins rocking, the DOW will be rolling, off a cliff.
Deflation is not a pretty picture, and silver/gold may benefit only if too much paper money is used to inflate the global economies. i.e. Hard assets to hold values while Rome burns.
Seems like inflation would return once the economies get grounded again in realistic valuations and begin the rebuilding process.
No matter what, it would be a long road to recovery, as we've only begun the agonies of the current cycle of repair by trying to set upright the ships of state.
Just did a quickie 1 yr chart on silver. There'll probably be some resistance at the downtrend line(s) at $15, $16, and $17 ish, although that's the zone that silver was in free fall on the way down so there's not a lot of noise/congestion in that area to confuse things. It'll be an interesting pivot point/zone to watch.
A convincing break above that would be bullish for silver and will probably also mean that the Dow is in free fall and has broken convincingly below the current level.
Thinking out loud here on silver....
silver has changed from it's inverse relationship to the dollar and now seems to be trading on fear of inflation in the future and devaluation of all currencies as they pump money into the system.
With the dollar strong at the moment it would seem to be a good time to buy silver with dollars since you can get more for less. But when inflation does kick in it'll scream higher(remember, I'm just thinking here)
Since DEC/JAN, silver is trading in an inverse relationship to the market instead of in tandem with it. It's gaining momentum and is one of the very few things going up now, which would seem to drive just that many more people into it.
It's catching up with gold as the ratio is narrowing.
And like that article said...all it'll take is one high profile investor asking for his physical silver and it not being delivered to send it flying to it's historical ratio to gold and maybe beyond.
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=DXY&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=7&freq=2&startdate=&enddate=&hiddenTrue=&comp=slv&compidx=DJIA%7E1643&compind=aaaaa%7E0&uf=0&ma=2&maval=35&lf=16&lf2=0&lf3=0&type=4&size=2&optstyle=1013
Hmmmmmm.....
I was looking at a chart of the DOW going back to just before the Great Depression.
If you draw a trend line along the bottoms from just after the Depression until now it ends up at just below 4000.
That trendline inplies the normal growth curve over time and eliminates the bubble that began in the '80s when this new leveraging approach began that set off the hyper-growth over the last 30yrs or so.
Now that banks are being forced back into the more normal range of leveraging I fully expect the Dow to revert to it's mean.
How we get back there is the only question in my mind. We can either head back there fast, hit the 4K level and immediately resume normal growth....OR,
we can slow down the free-fall and drag this out for several years and have a slower fall while we wait for the normal growth trend to catch up with us.
Even with this parachute that Obama is attempting to supply us with, we can only slow down the fall. How much it slows down will determine how low it goes before the trend catches up.
It's like jumping out of a plane. You're gonna' hit the ground one way or the other. NO PARACHUTE = freefall to 4K ...PARACHUTE = drift sideways in the wind for several years and dropping to 6K
Even with a good parachute, I think we're in for our own version of Japan's "lost decade". Without one...ARMAGEDDON
(click on chart link below and then click on MAX for the time scale to see the chart of the Dow from 1925 to the present. It clearly shows the Great Depression drop, the post WW2 bubble and the post 1985 leverage bubble. Now we're going back to the normal and sustainable growth trend. How long it takes to get back there is wholly dependent on how good our parachute is and how far we drift sideways on the way down. 4Ks/5Ks/6Ks....all possible)
http://finance.yahoo.com/echarts?s=%5EDJI#chart5:symbol=^dji;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Silver has spiked up on the overnight trading..Don't know if it will hold in the a.m.
If continues, 14.00 in the offing.
Yes I read Cooper's articles there and Clive Maund's, ect.
The articles by Theodore Butler are the most unnerving, about the manipulation of silver by the heavy hitting shorts...
Why silver performs better than gold
2009-02-16 09:30:00
Peter J. Cooper
The closing price for silver last week was $13.70 while gold was at $941 per ounce. Precious metal prices are clearly in a rally, and a fairly gentle and sustainable one, rather than a price spike.
And yet silver is out performing gold. By my approximate calculations silver has risen about four times faster than the yellow metal over the past few weeks.
Of course, we have also seen this volatility work in reverse as recently as last spring. Then silver suddenly lost more than half its value while gold proved more resilient and rebounded more quickly.
However, the idea that silver will lag along way behind gold - due to its status as an industrial metal hit by the recession - and then catch up at sometime in the future, looks disproved.
Indeed, the message is surely that if you think the current gold rally has further to run - and the long list of financial experts jumping on this bandwagon now appears worryingly like a consensus view - then you might do much better to buy silver instead.
Certainly historical precedent is on your side if you do as the gold:silver price ratio always tends to narrow in a financial crisis. One reason is that silver stocks are less than a hundredth the size of gold stocks and so there is the simple play of supply and demand on the price relative to the supply and demand of gold.
Gold bugs hate to admit this obvious truth and can reasonably point to the volatile trading history of silver which has a nasty habit of catching silver-bulls out. Yet silver is currently trading at a lower absolute price per ounce than 30 years ago, and any suggestion of over-valuation is laughable.
It is also true that the silver futures market is the most manipulated in the world. That makes serious trading activity impossible, and buy-and-hold the only sensible strategy.
However, there has been plenty of evidence recently to suggest that the control of the spot price of silver by the future market is about to breakdown. And when that happens silver prices will go to the moon.
Courtesy: www.silverseek.com
Government Bonds May Be Last Bubble: Jim Rogers 10 Feb 2009 | 05:59 AM ET
Investors will have to short government bonds at some point despite their current attraction, as the amount of debt issued is "staggering" and inflation risks are down the road, Jim Rogers, CEO of Jim Rogers Holdings, told CNBC Tuesday.
The low rates policy promoted by central banks is likely to pop a fresh bubble in government bonds sometime in the future, Rogers said.
"I was short long-term government bonds in the US, I had to cover a little loss because the head of the central bank said he was going to buy US long-term bonds, and he's got more money than I do," he told "Squawk Box Europe."
"I plan to sell short US government long bonds sometime in the foreseeable future… I don't know when, whether it this quarter or this year," Rogers said.
If long-term interest rates continue to go down, then "you've got to sell short government bonds, because the numbers are just staggering" when it comes to the amount of debt issued by the US and the UK, he explained.
Pros: Gold to Jump to $1,200 as Bailouts Mount
"Government bonds may be the last bubble that is developing. I'm not short government bonds right now," Rogers said.
The rise in the US dollar was likely caused by short-sellers covering their bets but the trend was unlikely to last long-term, he said.
"There are huge short positions in the dollar, everybody is trying to cover. I'm not selling my yen yet, but it's an artificial rally too."
"I sold all of my sterling, I wouldn't buy sterling for the next 5 to10 years. The same is happening to the US economy, I'm not picking on the UK," Rogers added.
He reiterated his view that, with North Sea oil reserves dwindling and the City of London shrinking because of the financial crisis, the UK had no big industries to fall back upon. The euro and other currencies from the Continent are likely to fare slightly better than sterling, but they were not a 'buy' in his view, Rogers said.
Check Currencies Here
"I'm not buying any of these currencies at the moment. I still own the euro, I don't own sterling anymore, I still own the Swiss franc. Europe at least is not a huge debtor, like the UK is," he said.
Commodities continue to be the safest bet as fundamentals were good because when the economic downturn is over, the world will need raw materials, he said.
"The fundamentals of commodities are improving through all of this," Rogers said. "You're not going to see a mine of any kind opening in 10 to15 years."
Agricultural commodities, where prices fell a lot, oil and gold may also be good for investors, according to Rogers.
"I'm buying gold just because I'm periodically buying gold, because I do expect it to be much higher over the next decade," Rogers said, adding that history has never seen all major central banks printing money "as fast as they can" at the same time.
"I know we're going to have serious inflation down the road," Rogers said.
© 2009 CNBC.com
I hear you. This article has a very cool chart showing that disparity and the time frames in which the ratio disconnect has occurred.
http://news.silverseek.com/Zealllc/1233939789.php
Just wanted to let you see this article that has a blurb near the end of it that reiterates that technical fund buying is occuring in silver due to the narrowing of the gold/silver ratio back toward normal ranges.
A nice third party confirmation of what we've been expecting to happen eventually, and it's nice that it's also institutional buying.
I have a feeling that by the time the hyper inflationary mode hits, the institutions will be well positioned to take advantage of the improving ratio.
Here's the article...
http://www.commodityonline.com/news/Gold-silver-fall-on-dollar-gain-15002-3-1.html
VIX is at a critical point on the 10 day chart with no more room left to squeeze it. Gonna' make a big move within a few hours of right now looks like.
The USD is screaming up after hours also, so I'm betting the VIX is going to make a big move up out of this wedge.
The market's just been waiting and aiming for this "buy the rumor, sell the news" move on Obama's stimulus plan.
Tomorrow the market tanks along with precious metals.
Hang on to your hat, and short something quick!
We're gonna' test the bottom again. Only thing that might keep it from breaking down below the old low will be hope that jobs and foreclosures are no more than 6 mths from turning around.
Personally, I think it's gonna take a lot longer than 6 mths to reach that point.
If Dow 6k is gonna' happen, it's probably just around the corner now.
Best of luck guys. TTYL
The problem with socialism is that you eventually run out of other people's money. -- British Prime Minister Margaret Thatcher
And, starboy asks, when will that money be devalued?
--------------------------------------------------------------
Inflation specter has some investors pining for gold
Fri Feb 6, 2009 7:55pm GMT
NEW YORK (Reuters) - Unease over a surge in U.S. government borrowing has some analysts nervous that, even as the immediate threat of deflation looms, hyperinflation on a global scale may be the eventual result.
A recent spike in both gold prices and the cost of insuring sovereign debt against default shows that investors worry an eventual meltdown of major currencies cannot be ruled out.
Economists emphasize that the prospect of a Weimar Republic-like crisis of confidence in money itself is not the most likely endgame to the global credit crisis.
They also note that, given the predominant risk of deflation, policy-makers have little choice but to flood the financial system with money, if only to counter the most rapid retrenchment in U.S. consumer spending in half a century.
Yet those investors who are less prone to taking big risks note that gold is the most obvious hiding place from the nightmarish scenario of vanishing trust in fiat money, or paper currency not based on a hard asset.
Indeed, its latest jump was triggered in part by massive government debt issuance, which some say threatens to undermine the value of the paper it is printed on.
"That sovereigns don't default because they can print money is technically true, but the big question is whether the money is worth anything," said Jay Mueller, senior portfolio manager with Wells Capital Management in Milwaukee, Wisconsin.
"In the movement of gold you are seeing the fear that the dollars that you could pay back in aren't worth as much," he said.
Spot gold has rebounded from a recent low in November around $710 per ounce to $914 on Thursday, a 29 percent rise. At the same time, credit default swaps on five-year Treasury notes have recently spiked to a record 85.9 basis points, up more than 80 times pre-crisis levels.
In previous periods of high inflation, such as the post-World War One years in Germany's Weimar Republic, precious metals are among a handful of hard assets that have been able to conserve their worth.
In that context, some analysts worry a huge expansion of the supply of money, which could run to about $8 trillion in the United States alone, will stoke a surge of inflation down the line.
This is not to say that gold investing is without perils of its own. "Price fluctuations in gold over the last 30 years don't tell me that's the place where I want to put the majority of my money," said Thomas Higgins, chief economist at Payden & Rygel in Los Angeles, California.
Nonetheless, the vulnerability of the U.S. currency has some experts recommending investors hold at least some gold in their portfolio.
"It is hard to understand why the dollar should continue to demand respect," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey. "We are in a much different geopolitical environment than 10 years ago or 20 years ago, with the U.S. being the largest debtor nation and China being the largest creditor nation."
A SOVEREIGN GAME OF CHICKEN
China, the biggest foreign holder of dollar-denominated Treasury securities with some $681.9 billion or about 12 percent of Treasuries outstanding, might pare back its dollar holdings, a worry for the U.S. bond market and currency.
To be sure, such fears have often been overhyped and, to date, have proven premature. But as plunging house prices show, past performance may not be a great indicator of future returns. That becomes especially true as debt issuance begins to dwarf most historical precedents in the United States, excluding the period of World War Two.
This year alone, analysts expect the U.S. government to issue some $2 trillion of debt on top of the nearly $6 trillion of Treasuries outstanding. Some have begun calling even this startling estimate conservative.
And there are few alternatives to the buck. The fiscal situation of governments around the world is deteriorating, as evidenced by ratings downgrades of Portugal and Spain.
Reflecting this deterioration, spreads on credit default swaps for European countries have experienced a similar pattern to those in the United States, rising to record wide levels. Some investors are also piling into inflation-protected bonds, against the advice of mainstream economists.
Dollar bulls note that, in the case of the United States, an actual default -- i.e., a missed payment -- is highly unlikely. Given the dollar's status as the world's leading reserve currency, the U.S. government could simply print unlimited quantities of money to repay its creditors.
But that could still open the door to a precipitous drop in the currency's value and, potentially, even hyperinflation, analysts warn.
And while a downgrade of America's standard-bearing AAA credit grade seems far-fetched in the near term, the rumblings from the ratings agencies were already emerging.
In a report on Thursday, Moody's Investors Service warned, "The U.S. government's financial position is projected to worsen considerably over the coming two years."
(Reporting by John Parry and Pedro Nicolaci da Costa)
© Thomson Reuters 2009 All rights reserved.
We could call it All American Trollville. Lol!
All those job losses anounced today and the market buys the financials. Go figure. 2 more banks went insolvent today as well, regionals...
Yeah, we'll be the most popular guys living under the bridge.
Time will tell, guess it can't hurt to hold some of the hard assets until we see where the heck this economy is headed...
Ya know, to buy coffee and doughnuts.
Good news for SILVER and GOLD, but especially SILVER...
UBS raises 2009 gold forecast to $1,000/oz, ups silver, platinum
London (Platts)--4Feb2009
UBS has raised its average gold price forecast to $1,000/oz for 2009, and
expects the strength in gold to pull prices for silver and platinum up along
with it, the investment bank said Wednesday.
"Purchases of physical gold have jumped over the past six months as
investors' fears about the current financial crisis and the possible outcomes
from government efforts to support banks and economies have intensified," UBS
said.
"We believe that a doubling in investment demand (compared to 2007) is a
reasonable assumption considering the recent inflows into the gold ETFs, where
the past six months of purchases has totalled 8.65 million oz, slightly more
than the full-year inflow of 8.1 million oz into these products in 2007," the
company said.
This figure is also consistent with the reports of physical investment
flows into bars and coins over the past six months and estimates by a UK-based
consultancy GFMS of bar hoarding in the second half of 2008, UBS suggested.
"Based on simple regression modelling we estimate that this will drive
gold to an average $1,000/oz in 2009, from $700/oz previously," UBS said. "For
2010 we have assumed that investment demand will fall back to the already high
levels seen in 2008, which generates a gold price of approximately $900/oz,
and we see the gold price falling back further to $800/oz in 2011."
RAISES 20089 SILVER FORECAST TO $14.75/OZ
The company has also raised its silver price forecast for the period,
noting that "compared to gold, silver does not have as wide an appeal as a
safe-haven investment, the metal is not without its adherents: as gold moves
higher, silver tends to follow."
UBS now sees silver averaging $14.75/oz in 2009 and $12.80/oz in 2010,
from its previous forecasts of $8.40/oz and $8.95/oz, respectively.
"The metal's greater proportion of industrial applications has seen
silver underperform gold over the past year ... but a rising price environment
for gold should see silver reverse some of this underperformance," UBS said.
In addition, there are indications from the recent performance of silver
that the metal has been able to lose some of its industrial tarnish, the bank
said, adding that correlations with the copper price - which increased in
2008 as silver fell sharply - have recently declined, while silver's
correlation with gold has increased back toward historical norms.
"Consequently we have made greater upgrades to the silver price compared
to gold," UBS said. "But despite this, silver's historically higher
volatility, especially to the downside during times of correction, makes it a
riskier investment than gold."
PLATINUM 2009 FORECAST UP, PALLADIUM UNCHANGED
UBS has raised its average platinum forecast for 2009 to $1,050/oz from
$900/oz, and left its 2010 forecast unchanged at $1,100/oz.
"Platinum very rarely trades at a discount to gold and when it does, the
discounts are short-lived," the bank noted. The market is seeing some
safe-haven buying, jewelry demand remains relatively buoyant compared to other
precious metals, and the destocking by automotive companies which hit prices
in 2008 is unlikely to be repeated, UBS suggested.
The bank left its forecast for palladium unchanged at $190/oz in 2009 and
$233/oz in 2010.
"We have made no changes to our forecasts for palladium, where the
interplay between limited safe-haven demand, ample above-ground stocks and
poor industrial demand has left the palladium market steady around our prior
forecast levels," UBS said.
Similar stories appear in Platts Metals Week.
See more information at http://plattsmetals.platts.com
Geesh, the feeling's mutual. Glad we shout at each other now and then...lol.
We could get it down here too. Who knows...
Everything in stockland sucking wind on my end. CTGI back down to almost where I started so many years back...
Only DOM and PGH, both as a drip, continue to pay the dividends.
Should be reaching trading territory, perhaps, on my silver positions once again, if the trend continues...
Good weekend to ya over there...Don't bury yourself yet. Lol!
It's starting to feel like that big quake I predicted a few months ago for our area around the first of the year is getting very close.
Earthquakes in S. Cal and Seattle and a volcano ready to blow in Alaska.
The quakes have been everywhere on the Ring of Fire EXCEPT HERE for years now. They can't/won't dance around both sides of us forever without finally banging us good here soon.
I expect to be feeling that 9+ quake, the ensuing tsunami and a new volcanic island sprouting from the Pacific off the central Oregon coast any time now.
Remember...you heard it here first. :D
Just wanted to say it's been nice knowin' ya'll in case I don't make it through.
Relax: There Will Be No Depression
Kenneth J. Gerbino
Archives
Kenneth J. Gerbino & Company
Jan 27, 2009
I want everyone to relax. You are being bombarded with numerous facts and figures that look pretty bad, but the facts are being interpreted with emotion and hype and hysteria. The predictive value of mis-emotion is usually chaos. There will be no Great Depression.
First, let's review what happened in the last few years in simple terms:
The Federal Reserve manipulated interest rates below the real market rate for over a decade, creating dislocations in the normal markets.
Low interest rates forced retirees and savers to abandon safe investments and buy into all sorts of higher risk investments, including the stock market. (As a grandmother of one of my employees said many years ago, "I can't afford to live on 3% interest when I use to get 6%"... a sad but true story).
Easy money created speculation and an artificial business expansion as the good times rolled.
The dot.com bubble was the first sign of trouble from the recent easy money regime. The solution: more easy money to bail out Wall Street and avert further panic.
Commercial banks are allowed to become investment banks as Glass-Steagall is repealed. Commercial banks can now invest and speculate globally outside of their normal areas of expertise.
Real estate booms, as new and creative ways to lend money appeared. Lending became a no brainer as loan packages could be sold away to another institution covered by a new insurance scheme (Credit Default Swaps). Therefore credit worthiness of customers became less important. Lenders became undisciplined. Who cared if the loan defaulted if the loan was "insured?"
Other exotic derivatives were concocted by the investment banks and commercial banks to make more fees and profits. Tried and true centuries old banking policies 101 were thrown out the window.
The government pressured financial institutions to lend money for homes to millions of borrowers who were not only unqualified but high credit risks.
The excessive and low interest rate loans for homes fueled an even more over-heated and extended housing boom and housing price inflation - creating a housing bubble.
The over-the-counter derivative market went beyond $300 trillion and no one cared. $400 trillion - no problem. $500 trillion - no big deal.
Wall Street and the establishment press and authorities did not pay attention to the hard money newsletter writers who were screaming bloody murder about derivatives: Schultz, Skousen, Dines, Wood, Daughty, Sinclair, Russell, Mauldin, Casey, Katz, Turk, Taylor, Adens, Coffins, Lundin, Morgan, Ruff, Roulston, Grandich, Nadler, Bonner, Day and others.
Complacency was everywhere. The Dow was over 14,000. Wall Street and Main Street thought the economy was "fine," paper money was "working" and debt levels were high but no big deal, the Fed was in control. So far so good.
The banking industry usually gets hit hard when the economy gets hit hard. But this time the major commercial banks were also speculating along with the investment banks.
Huge losses from leveraging and speculating in stock and bond markets as well as derivatives start showing up at the largest commercial and investment banks in the U.S. and abroad.
A national nightmare now is confronting Washington.
Global stock markets collapse and credit markets seize up everywhere. Many foreign countries are as bad off as the U.S.
The financial pyramid was brought on by easy money. We are now faced with global investment losses and economic numbers that are at dangerous levels, and foretell a drastic future.
But the future will be the exact opposite to what Wall Street and Main Street think will happen.
Why There Will be No Depression
The Fed, U.S. Treasury and foreign central banks will print their way out of the problem. A bad solution to a bad problem.
The U.S. is in a recession. This is the natural reaction following the huge economic paper money binge that has taken place the last 15 years. The major banks, insurance companies and investment houses are in real trouble. The pain is too much and the government will print the money to bail these institutions out.
3 million people are losing their homes. They should never have bought the homes in the first place. These people will go back to being renters. The homes are still there, they have economic value.
Investment bankers that busted Lehman, Bear Stearns and Merrill and lost their jobs will form hedge funds and buy many of these homes for 30 cents on the dollar. Then they will sell them in a few years for 50 cents on the dollar to people and other funds. Some people will move into a home and get a good bargain. Funds that buy these 50 cents on the dollar homes will sell them in 2-3 years for 70 cents on the dollar. Life goes on.
Banks and investment houses that lost money on these homes are already being bailed out. The losses are being covered by the printing press or debt from Washington.
Unemployment: This is bad. In the U.S. we are at 7.2% and going higher. We are not at 10.8% ('82 recession) or 9% ('74-'75 recession) and may not even get to these levels. Sophisticated investors say, "Unemployment is being low-balled by the government, it's much higher". I agree. But check out Shadow Government Statistics' website run by brilliant economist John Williams (who should be a White House Adviser). This shows that the "shadow or real" unemployment number could actually be 17%. Sounds like a disaster. But back in 1994, the "shadow" unemployment number was 15%. So what happened in 1994? GDP was up 6.2%. The S&P 500 the following year was up 34%. There was no Depression from this horrendous unemployment. Official U.S. unemployment hit an 8-year high in 1992 at 7.8%. The solution to this was a 14% increase in the money supply (M1) and the stock market went up 6%. Do not panic because of unemployment.
There are still 144 million people getting paychecks. This means the economy is not dead yet. They will either spend the money or save some of it. When they save it, sooner or later the banks will lend to someone to buy or build or invest in something.
The average wage earner in the U.S. makes $47,000 a year. Multiply this by a possible 12% official unemployment rate which would be considered a disaster in this country, and you have the following: 18 million people out of work. Using $47,000 per person, this would equal about $850 billion a year of lost income and GDP. That would be a huge hit to the economy.
But wait a minute. Unemployment insurance for a $47,000 worker is about $400 a week. That reduces the $850 billion considerably. Also, the Government will simply print more money to handle this. They could print half the amount of the possible lost GDP - $425 billion. Using Washington logic, this would effectively handle half the consequences of 18 million unemployed people. Then it would be like there were only 6% unemployed. Printing or borrowing $425 billion would not be difficult compared to what they are already doing.
The great recessions of 1974-5 and 1981-82 resulted in the following: GDP increasing on average 15% within 36 months, the stock market booming the following year, and unemployment going down dramatically the following two years. Why? Because they increased the money supply and "bailed out" everyone with paper money.
The 74-75 recession had an 85% (that is eighty five % and not a typo) decrease in the price of the average NYSE stock from the previous high in 1973 and the Dow was down 41%. In 1982, the Dow Jones dropped 34% from its previous high. Both these market wipe outs were handled by the money supply being increased by 12.6% in 18 months in 74-75 and 14% in the 81-82 period.
The money supply increases in 2009 and 2010 could reach 50%!
So far, with bailouts, guarantees, the stimulus packages, $2-3 trillion of new money is already a foregone conclusion. This will equal a 25-35% increase in the money supply. The U.S. government will print as much money as is needed. They have panicked and are now going overboard. It is obvious that whatever happened in the past is going to happen again.
This means that we are not going to have a Depression but a huge paper money induced boom. It will be artificial and inflationary. It is all in the works right now.
Finally, if we were going to have a so-called Depression, why is copper above $1.50? Copper for delivery in December of 2009 and 2010 is above $1.60! You have heard the expression Dr. Copper. It is because as this commodity goes - goes the industrial world. It has always been a great economic indicator. Copper prices would be at 60 cents if a Depression was coming. Copper above $1.50 is saying, despite all the horrendous layoffs and headlines, that there is a lot of life left in the global economic patient.
The financial system will be temporarily "saved" by paper money but working people and savers will be eventually crushed by this currency depreciation. Capitalism and free enterprise will get another bad rap when inflation rips through the system. Honest capitalism and classic free enterprise does not include paper money... the cause of all modern day economic problems.
What to Do
Expect Inflation not a Depression.
Expect a boom to start sooner than later.
Know the past and respect logic, not headlines.
Am I telling you all is OK? No. I am telling you things are as bad as you think. But the authorities are using this crisis to bail out the system with paper money and because of that, the economy will once again go into a so-called boom that will be very inflationary. If you think a Depression is coming you will have your assets in the wrong place at the wrong time.
What Happens Next
The economy stagnates for another 9-12 months then turns around.
Unemployment goes down with the induced economic upturn.
The stock market rallies but never gets above its old highs.
Inflation comes back with a vengeance.
Commodities resume their bull market and turn the deflationistas into inflation believers.
Interest rates will go up with inflation and probably to much higher levels.
The stock market will go down when interest rates start going up.
Long term bonds will become the worst investment in the world.
The dollar will go down but so will other currencies as many world governments print their way out of their economic woes as well.
Gold will go to new highs.
Housing and real estate will recover but higher interest rates will slow this sector down considerably in the future.
The gold and silver mining stocks will become the best performing sector on Wall Street for many years.
The price of oil will go up due to inflation and global production declines of 5-8% per year from most of the largest oil fields in the world.
The U.S. "recovery" will help the world recover and almost all countries will have another artificial economic expansion from all the paper money they have printed as well.
China and India will create more shortages of basic materials and commodities by the sheer size of the populations and their economic and industrial progress.
The U.S. will have even more economic dislocations from all the new paper money and debt taken on by Washington.
The country gets set up for the next horrible recession some time in about 3-4 years.
A Depression is impossible in the old sense of the word. If one describes a depression as the loss of purchasing power of the wage earner (a correct definition), then we have been in one for the past 50 years since wages have not kept up with the cost of living. But since everyone is thinking breadlines and the 1930's, I will stay with that picture for our definition. It is not going to happen.
Also, remember that the $2-3 trillion bail out numbers you are reading about can easily be bumped up to $4-5 trillion. Why not? The reason for the increase is simple... "We are heading into the Greatest Depression in history." As long as this misguided concept gets press and the NY Times, the media and politicians buy into it, then the government has a green light to create as much money as is needed.
Next week I will finally get to the promised article about deflation and inflation.
For more articles on the economy, gold and mining stocks please visit our website at www.kengerbino.com.
January 26, 2009
Ken Gerbino
By: Chintan Karnani, Insignia Consultants
WEEKLY TECHNICAL REPORT FOR WEEK BEGINNING 26TH JANUARY, 2009.
IS THE GOLD RALLY A MERE BUBBLE?
(This is the first time I've seen this fellow make a stand regarding gold, as usually he puts up charts about gold, silver, copper and makes short commentaries on price possibilities. And his comments are posted on silverseek.com).
Note: My underlining in the below article.
Asian Metals Market Update for 27th January, 2009
I was reading the internet there was apprehensions over the current rise in gold prices. Some of the comments were that the current gold price rise is nothing but just a bubble. I do not agree to this view. In my view the current rise in gold prices is here to stay in the long term but in the short term and medium term there will be wild fluctuations.
The decline of the US dollar standard and other paper currencies is my first reason. Over the past fifty years central banks have littered the world with an unlimited amount of paper currency. The purchasing power of paper currencies is on the decline with the passing of each day. The US dollar is the medium of exchange in global trade. The share of US dollars in global trade is falling with the passing of each year. Since gold and other commodities are quoted against the US dollar, the value of gold and other commodities are bound to rise as the purchasing power of the US dollar declines. Gold is money of the future.
For centuries and centuries the west have always ignored the importance of gold as an investment while the east such as India, China and rest of Asia have always invested in gold. The bulk of global physical gold demand came from the East. Now the western world has also started investing gold. If the west starts to invest in gold then gold prices are bound to zoom.
I can write endless pages on the need to invest in gold. The rise in gold prices is here to stay. Gold prices will only fall when there is a secure alternate investment available. In the long term gold may not give very high returns as compared to equities. But investment in gold at lower prices is virtually risk free.
PROSHARES...COMPLETE LIST OF LONG AND SHORT ULTRA ETFs
http://bespokeinvest.typepad.com/bespoke/2008/07/proshares-ultra.html
Entered 9/10/08....Cramer's prediction for the bottom in the housing market...June 30, 2009
THE GOLD/SILVER RATIO STRATEGY and THE CASE FOR SILVER http://www.gold-eagle.com/editorials_03/sanders030703.html
KITCO SILVER AND OTHER REAL TIME "SPOT" CHARTS http://www.kitco.com/charts/livesilver.html
USDX DOLLAR INDEX...CHARTS/STATS/ & BULL/BEAR COMMENTARY http://www.fxtrademaker.com/usdx.htm
LIVE UPDATING PRICES/CHARTS...GOLD/SILVER/USD/FOREIGN CURRENCIES/LIGHT SWEET CRUDE http://www.post1.net/lowem/page/livequotes
SILVER INSTITUTE...THE REAL NUMBERS ON SILVER! http://www.silverinstitute.org/supply/index.php
SILVER/GOLD/DIA/$USD (side-by-side comparison charts)
http://investorshub.advfn.com/boards/read_msg.asp?message_id=27785873
Monex LIVE PRECIOUS METAL PRICES
http://www.monex.com/liveprices
Precious metals charts
http://www.infomine.com/Investment/HistoricalCharts/ShowCharts.asp?c=silver
Updating 'melt prices' and commentary on coinage
http://www.coinflation.com/
The Buillion Desk
http://www.thebulliondesk.com/
Yahoo Interactive chart link
http://finance.yahoo.com/echarts?s=HTE#chart1:symbol=hte;range=1y;indicator=split+dividend+rsi(7)+wpr(7);charttype=candlestick;crosshair=on;logscale=on;source=undefined
DOM PGH (drip divys)
http://finance.yahoo.com/echarts?s=DOM#chart2:symbol=dom;range=my;indicator=split+dividend+rsi(7)+wpr(7);charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
http://finance.yahoo.com/echarts?s=PGH#chart2:symbol=pgh;range=5y;indicator=split+dividend+rsi(7)+wpr(7);charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Yahoo Basic Stock Screener
http://screen.yahoo.com/stocks.html
Big Board Solar Stocks
http://finance.yahoo.com/q/cq?d=v1&s=AKNS+ASTI+CSIQ+CSUN+CTDC+EMKR+ENER+ESLR+DSTI+FSLR+JASO+LDK+QTWW+SOL+SOLF+SPIR+SPWR+STP+TSL+WFR+YGE
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