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The dollar could turn down tomorrow..... keep us posted alright.
thanks
Thanks Fabian.
Where would you be a buyer of the pms in here...?
Yes, he did Lee.From the beginning.
Heres part of it. On the financialsense. com site Tim Wood.
Then, from the Phase II low, the averages advance some 32 months. This rally was also a bear market rally separating Phase II from Phase III of the bear market and this time around the Industrials were able to move to a new all time high. In the process there was of course, another Dow Theory bullish Primary Trend change. However, the phasing aspect of Dow Theory was again correct and once this rally ran it course, the averages again headed lower. Note that this decline carried the Industrials to new lows, but not the Transports. As a result, a Dow Theory non-confirmation occurred in conjunction with the Phase III low and great values.
So, the moral of the story is that the bettering of the April high was not a so-called “Dow Theory Buy signal.” In reality it only served to reconfirm the existing bullish Primary Trend change. Also, I continue to believe that we are in a similar pattern to that of the 1966 to 1974 period. I believe that the rally out of the 2009 low is synonymous with the advance out of the 1966 low. One difference now is that the bull market period that preceded the 1966 top was only 24 years and the bear market period ran 8 years, which was the historical one-third the duration of the preceding bull market. In this case, the preceding bull market ran 33 years. Therefore, we should be dealing with a bear market of approximately 11 years. So, the unwinding of this bear market should have much further to go. Perhaps, QEII will keep this rally going a while longer. But, I don’t think that QEII or QEIII or even QEIV will ever be able to ultimately save the market from the natural forces. All these efforts are doing are making matter worse and if anything, postponing the inevitable.
Tim W Wood CPA
Cycles News & Views Author
Primary Tel 251.955.2327
Why don't you read puplava's website to have accurate insight....aka--Tim Wood.
financialsense.com
Choad--surrender.Its better in such a case.move on.
I totally agree with you. i'm buying silver though.Sold pms today to garner cash position...
Basserdam...look at TDC.V--tyhee developement.
Dear Eric,
Now there is one hell of a Christmas Gift.
Regards,
Jim
H. R. 4646 – Cite As The "Debt Free America Act"
CIGA Eric
Taxation without (proper) representation was the slogan used by the original thirteen colonies gave birth to the ideas of constitution rights and was a major driver behind the American Revolution.
H. R. 4646
I have gone into THOMAS (Library of Congress) and printed out and read all 15 pages of this bill which has been given the “Short Title” of “Debt Free America Act.”
Just think, if you deposit $5,000.00 into your checking account or savings account the bank has to take out 1% or $50.00 of that money and send it to Washington . Then, any checks or cash you take out of your bank they will deduct 1% from what is still in the bank and send it to Washington . Total put in the Bank $5,000.00. $100.00 of that you give to Washington .
This bill, spells it out that everyone will pay the Government 1% of their gross income.
Page 9 states the House and Senate shall convene not later than November 23, 2010 and Page 11 states the vote on passage shall occur not later than December 23, 2010.
Jeffrey
Source: govtrack.us
More…
From jsmineset
Lee, What is POMO?
thanks
From Bloomberg 10/26 rare earths.
Race to Replace China’s Rare Earths May Take Decade (Update1)
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By Brian Parkin and Tony Czuczka
Oct. 26 (Bloomberg) -- China’s decision to curb exports of rare earths is set to spark a global race for alternative sources that may still take a decade to secure sufficient supplies, the head of the German commodities agency said.
More rigid environmental standards in the European Union and ethical questions over sourcing raw materials from developing nations mean there can be no quick fixes in finding viable alternatives to China, producer of more than 90 percent of the world’s rare earths, said Volker Steinbach, who heads the Hanover-based government agency. Stepping up global pressure on the Chinese government to resume exports may be the best short- term option, he said.
“We’re faced with a gap in rare-earth supplies that cannot be plugged overnight,” Steinbach said by phone ahead of a conference in Berlin today on securing commodity resources. “Realistically, bringing rare earths in volume to markets from new sites like Mongolia, Africa and Greenland may take five to 10 years.”
Germany joins Japan and the U.S. in calling on China to restore rare-earth exports after the Chinese government in July announced cuts in production of the elements used in everything from hybrid vehicles and flat-screen TVs to weapons systems. With demand for rare earths already forecast to outstrip supply, a scramble to secure substitute supplies is underway.
Chile, South Africa
German Economy Minister Rainer Bruederle, whose ministry is hosting today’s conference, plans seven “strategic partnerships” to secure commodities, including rare earths and copper, according to two officials with knowledge of the matter.
The partner nations are Mongolia, Namibia, Nigeria, Kazakhstan, South Africa, Chile and Peru, said the two officials, who spoke on condition of anonymity because the plans are not yet public.
Safeguarding rare-earth supplies is “crucial” and Germany will forge partnerships with mining states to help do so, Bruederle said in a speech to the conference, without naming the countries.
The “ghost of protectionism” haunts global trade and China must realize that its policy is not a “one-way street,” he said.
China’s policy on rare-earth shipments is a sovereign right that doesn’t conflict with World Trade Organization rules, Foreign Ministry Spokesman Ma Zhaoxu said in Beijing today.
That stance won some support from the trade arbitrator’s director general, Pascal Lamy, who said the WTO has historically focused on combating import restrictions rather than exports, which “are nearer to sovereignty matters.”
‘Very Shallow’
The rule book on tackling export restrictions “is very shallow in the WTO,” Lamy said in a speech to the commodities conference in Berlin. WTO members should commit to improving on this situation, he said.
The German plans to diversify its sources of rare earths follow moves by Japan to secure supplies from Vietnam and India, while at the same time coaxing China to ease exports.
Longer term, Chinese demand for rare earths looks set to remain, said Steinbach, whose agency was created by the Economy Ministry last month after industry complained of government inaction to safeguard access to commodities such as europium used in flat-screen televisions.
The cumulative cuts announced by China will put export quotas this year at 30,000 tons, or 18,000 tons less than in 2009, said Steinbach, a geologist by training.
“What the numbers are saying is that China is using about two-thirds of its own production this year -- up from a quarter 10 years ago,” said Steinbach. “To me, that’s a signal that diminishing quotas may be here to stay.”
Even so, starting up private partnerships to produce rare earths from Greenland, Mongolia and Kazakhstan “face a thicket of European Union environmental regulations as well as building infrastructure problems that could take five to ten years to solve,” said Steinbach.
To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Tony Czuczka at aczuczka@bloomberg.net.
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
Last Updated: October 26, 2010 06:44 EDT
Brightness, you are very well read and /or knowledgable . The following IS on a gold site and a fairly
honest site...or so I believe.As related your bringing in China.
Market Commentary From Monty Guild
Posted: Oct 21 2010 By: Monty Guild Post Edited: October 21, 2010 at 12:04 pm
Filed under: Guild Investment
Dear CIGAs,
The U.S. hopes to lower the value of the dollar to improve exports
Here is how they do it:
Please notice the chart reflecting the trends in the holdings of U.S. treasury debt by Japan, China, and the U.S. This chart tells the story of what is happening to the U.S. dollar and the U.S. economy.
You will notice that Japan is increasing their holdings of U.S. debt. This means they are buying U.S. debt, selling yen to keep the value of the yen from rising too much. It seems clear to us that the Japanese exporters are suffering greatly as the yen has risen to high after high and they are pressuring the Japanese government to do something to get the yen down. Despite their efforts, the yen has continued to strengthen. How long will this continue if it’s ineffectual?
The Chinese, on the other hand, have been decreasing their ownership of U.S. government securities for over a year. They decreased their holdings from $983 billion in Sept 2009 to $846 billion in July 2010 (which is the latest data in the chart). It is no secret that the Chinese have been diversifying their large reserves away from being so concentrated in U.S. dollars
Meanwhile, the U.S. Federal Reserve is now increasing their purchases of U.S. treasuries, and are planning to do a lot more of it in the near future. This is quantitative easing—pumping money into the U.S. system—and it is a primary reason, the dollar is, and will continue to be, weak.
As you know, if the supply of an asset or commodity rises and the demand stays the same, the price will fall. In this case, the asset or commodity is U.S. dollar denominated treasury bonds. Large budget deficits are increasing the supply of these U.S. dollar denominated bonds each month. For now, Japan is increasing their holding, but it looks like the appetite for these bonds from other countries is waning. This is a key reason the price of the U.S. dollar is falling.
India to allow foreign retail investors to buy Indian stocks
India’s Fabian socialism is slowly giving way, and foreign retail investors may soon be welcomed into the Indian equity market. Guild Investment Management is a registered Foreign Institutional Investor (FII) in India. We went through the registration process twice, and remember the inefficiency, expense, and hassle of going through the permitting process to get registered. The process was filled with delays, occasional surprise government taxes or fees, and bureaucratic hoop-jumping. When we did it in 2007, the process was slow, but when we did it in the mid 1990’s, the process was laughable. This makes us hopeful that they are moving in the direction of opening more to foreigners, and making it fairly easy for international investors to invest. If they do this it would be a major improvement for Indian stocks; sending them much higher.
U.S. financial authorities are frightened that U.S. may fall, like Japan, into a prolonged deflation
Clearly, U.S. Federal Reserve officials are frightened that the U.S. may be falling into a Japan-like deflationary environment, and that it may last for many years. The Japanese stagnation and deflation cycle has lasted for 21 years, and is not near ending. Those visiting Japan today know what I am talking about. The entire nation is suffering from a depression about the future prospects of the nation and its people.
As we mentioned two letters ago, we believe that Federal Reserve officials will try to create inflation in order to reverse the deflationary trend toward which the U.S. is moving. Currently, core inflation is at a 29-year-low. All of the following data points argue for more inflationary activity and targeting: a deleveraging banking system; consumers who save and cut spending; a foreclosure crisis on home loans (which means lower home prices); and an increased popular movement towards greater public sector austerity.
The Fed’s actions are intended to get the consumer into an inflationary psychology, in which investing, spending, and expanding business are paramount, rather than the retrenching, deleveraging, saving, and cost-cutting psychology.
If they are successful in doing so, we can avoid going through what Japan is. If not, we could see a long and devastating deflation in the U.S. As we have been stating for years, politicians will never consciously opt for deflation, since deflation ruins political careers and destroys the hope and verve of a nation.
We expect more quantitative easing (QE), and inflation targeting at 2% or more (up from the current 1% target). We believe the Fed wants to allow inflation to rise to 3%, before they need to reign in any inflationary tendencies.
Tuesday’s panic about the fact that China raised interest rates by .25% is absurd.
To say that the market’s reaction was overblown is an understatement, and it was evident Wednesday, when many markets turned higher again. China will not stop growing because of this or even if rates were raised by an equal amount once a week for a month.
In China, interest rates are still below the inflation rate that most Chinese believe really exists. As in the U.S., official Chinese inflation statistics are inadequate. Chinese GDP growth will be strong in 2010 and for the next few years. Any decline in the Asian markets over the next few days or weeks created by reaction to this raise of interest rates will create buying opportunities.
China’s New 5 Year Plan
Growth is still the priority and it will focus on westward development in its interior regions with emphasis on technology and on critical industries. We believe this means an increased focus on mining resources and building their military. About $600 billion has been set aside for these areas thus far.
China’s plan will boost the social welfare of migrants from inland to the big cities and shift more migrants into urban residential status. This will also mean higher monetary compensation for farmers if their land is expropriated by urban development, and the opening of non-crucial sectors for more private investment. Social well-being is also highlighted, including housing for the poor, infrastructure build out, more roads, dams, bridges, ports, airports, railroads, etc.
Rumors about bad debts in China are clarified
For months there have been rumors of large bad debts had been created by city and provincial governments connected with borrowing to finance real estate projects such as government buildings and high-rise office buildings. China has done an audit and found up to $500 billion of potentially bad debts. This is a much smaller amount than some of the rumors have proposed.
China has the reserves and the economic growth rate to manage some bad debt issues. China’s total holdings of foreign bonds and currencies have risen to $2.6 trillion dollars.
This new high level of reserves reflects a small number of loans to the U.S. government and to its agencies. The Chinese have been diversifying their holdings to include more euro bonds and more bonds of the numerous countries with whom they trade. This is why the smaller countries in Southeast Asia and Australian currencies have been rising so rapidly: both the Chinese buying and the knowledge of this buying, which causes investors like us to buy the non-U.S. currencies.
Our Recommendations:
Investors should continue to hold gold for long-term investment. It will move to $1500 and then higher. Traders sell spikes and buy dips. Gold-related news: South Korea decided this week to increase the percentage of gold in their investment portfolio these purchases could be substantial. China continues to buy gold.
Investors should continue to hold oil. Oil-related news: Positive U.S. onshore inventories are neutral and offshore inventories held in tankers have declined substantially. A negative news event is that there will be an increasing supply from Iraq.
Currencies: For long-term investment, we do not like the U.S. dollar, the Japanese yen, British pound or the Euro. We do like Canadian, Australian, and Singapore dollars, the Thai baht, Malaysian ringgit, and Indonesian rupiah. We would use the current pull-back in the favored currencies as an opportunity to establish long-term positions.
Investors should continue to hold shares in India, China, Singapore, Malaysia, Thailand, Indonesia, Colombia, Chile, and Peru. We would use any pull-backs as an opportunity to add or initiate positions for long-term investors.
Investors should continue to hold food-related shares such as grains, wheat, corn, soybeans, and farm suppliers.
Continue to hold U.S. stocks for a further rally. U.S. liquidity formation through QE will create demand for many assets, including U.S. stocks.
All of these recommendations have unrealized profits. All of these positions are long-term recommendations; traders may want to sell rallies and buy dips.
A new recommendation is for investors to cover the short on Japanese yen. The Japanese just do not have the resources nor the political willpower to fight against further price rises in the yen. We have been wrong lately on our recommendation to sell short the yen after it has risen about 4% over the past 5 weeks since we said we were bearish on it. We continue to see the yen as overvalued, but it can stay overvalued longer than we had anticipated.
Another new recommendation is that we are less bearish on U.S. long-term bonds. We are removing our bearish view on long-term U.S. government bonds. 30-year U.S. treasuries have been volatile, but they not appreciated or depreciated from the point where we recommended that they be sold in August.
Why the change in recommendation? We still believe that too many bonds are being issued, and that the U.S. Federal Reserve has begun to target a higher inflation rate than we have currently experienced in the U.S. Both of these views are bearish on bonds longer term, however, we are also seeing positives that balance out some of the negatives. The first is the view that more QE is likely to occur, and the second is the fact that many pessimists believe that the U.S. economy will sink into depression, both of which are creating a strong demand for bonds. Thus, our current opinion is that we believe that it is too early to sell them short. The day will come for that, but it is not yet here.
Thanks for listening.
Monty Guild and Tony Danaher
www.GuildInvestment.com
I think you are spot on....
Re the rare earth element we can disagree.
How bout this...is it hype?
Casey Research
The Silver Sleuth
Jeff Clark, Senior Editor, BIG GOLD
Here's a couple new reasons to own silver that a lot of mainstream investors probably aren't aware of…
Due to increased demand from industry and investors, silver exports from China are expected to drop about 40% this year. And that's actually an improvement; customs data show exports plunged almost 60% through the first eight months. China exported about 3,500 metric tons of silver in 2009, but has exported only 970 tons through August of this year.
What a lot of Westerners don't know is that China ended export "rebates" two years ago to stem the shipment of natural resources leaving the country. As a result of the regulation, silver exports decreased in 2009 but are nothing like what they're experiencing this year.
In other words, the large drop in exports is a direct result of a huge increase in demand within China itself. According to one Chinese banker, the spike in demand is coming from all areas – jewelry, investment, and industrial. In his words, it's led to a "physical market shortage in the Far East."
How important is this? China is the world's third largest producer of silver (after Peru and Mexico), so the amount of silver coming to the global marketplace this year will drop by more than 74 million ounces. This represents roughly 8.3% of total annual global supply from 2009. If worldwide demand continues at its current pace, where is the extra metal going to come from? This alone tells us the price of silver will move higher.
My understanding is that this has very serious consequences for our tech industry and defense
systems...
I think a major war is baked into the cake. The Chinese know this as well. And the Russians.
I think a major war is baked into the cake. The Chinese know this as well. And the Russians.
start reading jsmineset.
MONDAY, OCTOBER 25, 2010
There's Fear Behind the Curtain
The blitz today of MOPE is beyond anything I have ever seen. Somebody is scared to death of something.
Jim
I agree with you Jim. The MOPE blitz is impressive. There are signs growing "economic roll-over" (see chart below) in more than a few series I follow. The solution is certain to be more quantitative easing (devaluation) at a time when global tensions continue to intensify as a result of it (see article below). I think that something is a sequence of events, both economic and social, beginning to unfold across the globe.
Eric
Chicago Fed National Activity Index (CNFAI) and S&P 500 Average:
Headline: China Said to Widen Its Embargo of Minerals
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
Source: nytimes.com
Source: chicagofed.org
BUY on the dips
It may be brilliant though there are others who are equal or better....
Do you know the return on his funds.....?
Last time I checked the returns were nothing to brag about.
Dear Hiker, I feel for you. We share the same love of plants and scenery.
I'm in Vt. My sister had a tornado earlier.
Hang in there and don't give up.
Best regards- FG
12 JULY 2010
China Ratings Agency Downgrades US Debt From Moody's, S&P's, and Fitch's AAA Rating
Currency wars. Well at least a Phony War for now. See, nothing has happened. All is well. Move along. Nothing to see here. Status quo intact.
The US sovereign debt gets a stiff downgrade, cut down from number one in the world, to a distant thirteenth place. Governments like China do not take actions like this randomly, and their quasi-state organizations do not march to the beat of their own drummer. It will be interesting to watch this develop, and calculate the strategy, to figure out the next steps.
From a thematic perspective, coming up, competitive devaluations, and a shift in the reserve currency regime that will resemble a seismic shift, most likely pivoting around the SDR composition discussions later this year.
The US battered the euro and has been sitting on gold and silver ahead of the SDR discussions. And now China has slipped a shiv between the ribs of the almighty Dollar. This is just the overture, the prelude to the dance.
And trade wars, well, at least trade wars more overt than the ones which have been ongoing since 1980, in which the US based multinationals thought they were pulling the strings, breaking the back of American labor.
And guess who the arms dealers are in this paper chase, selling to all sides? Who are the untouchables, the TBTF, a strategic asset in the financial arsenal of democracy? When these boys roll into town it's time to hide the women, children, livestock and provender.
The US media will downplay this, dismiss it, say it does not matter because China will not/ dare not/ can not/ do anything to change the status quo. And expect the spin to be laced with plenty of condescension. Oh those sly Chinese, just talking up their book, just like us. But who can take those little rapscallions seriously.
They are wrong, and they know it.
Well maybe not the news readers and the spokesmodels, who only know what they are told. But the strategists, the thought leaders, and the smart money most certainly know it. They just do not wish to share that information with you yet, because real knowledge is power. And show enjoy the show.
Watch how people react to this, and how they spin it to you. This will be an indication of either what they know, or the kind of character they have. Then you will know something about them and the kind of player they are. Remember it.
They think that you do not have a need to know anything about this yet, because you are intended to be cannon fodder, grist for the mill. Along with Europe, which is busy scourging its citizens into submission to more willingly serve the Anglo-American banking cartel.
And of course there is the new dictum, 'Extend and pretend: f it bleeds, bury it...'
And so the fog of war rolls in.
I suggest trading gold and silver. Keeping a core position.
Fois
euro .80 to dollar at what....
Some commentators are talking a euro at par to the dollar. I assure you that would be the end of the union and the beginning of the attack on the dollar that is certain to come.
If you have the emergence of national European currencies as a result of the failure of the union, the mirror image strength of the dollar would instantaneously disappear. Credit default swaps would turn their vengeance on the dollar. The Drachma would be incinerated. The Swiss and DM would be the stronger units.
If the EU fails so does the USDX. With no mirror image to hold up the dollar artificially, the US dollar will fall faster than Greece’s credit.
JSMineset 5/14/10
Regarding silver....recent behavior.
May 7, 2010 | Visit Online Version
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'Gold is the New Reserve Currency' - Larry Kudlow, CNBC
That quote was all over the Internet yesterday. There was another wonderful quote that I found posted in Bill Murphy's MIDAS commentary over at lemetropolecafe.com yesterday as well. This one could be the quote of the week, month, and year. George Dowd on CNBC described the U.S. dollar as "the best looking horse in the glue factory." Ain't that the truth, dear reader!
Anyway, the little gold rally in early London trading that I mentioned in my closing comments on Thursday, didn't amount to much. But, minutes before 9:00 a.m. in New York, that all changed as gold spent the next seven hours moving steadily higher despite heavy selling pressure from the New York bullion banks in electronic trading after the Comex close. Gold's high price spike came at precisely 4:00 p.m. Eastern time... and was recorded at $1,212.60 spot... and closed very close to that.
Silver remained fast asleep all day long... remaining within about 20 cents of $17.50 spot all day long... right up to, and including, the close at 5:15 p.m. Eastern time. The fact that silver did not confirm gold's move was something that I found quite alarming... and, in the past, has not bode well for future events in either metal. But, this time it could be different. We'll see.
As Europe and the Euro melted down yesterday, the dollar was one of the main beneficiaries... as it's value climbed over 100 basis point for the second day in a row on Thursday... but went sideways after 3:00 p.m. Eastern time. And, as of this moment [1:19 a.m. Eastern time], it's still trading sideways. Not that I'm knocking gold as the 'go to' investment of choice yesterday, but gold did nothing until after New York opened. One would have thought that it would have done better in London trading as Europe circled the drain... but it didn't.
Well, considering the slaughter in the equity markets both in the U.S. and Europe, I feel that we should count our blessings once again that the p.m. stocks performed as well as they did. In times past, a market melt-down of this size would have decimated the precious metals stocks as well... but times have obviously changed. Even the implosion after 2:00 p.m. Eastern time could not keep the HUI down... and it finished up 1.54%.
Wednesday's o.i. changes shows that gold open interest rose a smallish 1,067 contracts. Volume was about 172,000 contract with roll-overs removed. Although gold was up about three bucks during Wednesday's trading, silver got smacked again. The open interest for silver fell 2,535 contracts... volume was a hair north of 60,000 contracts. Silver open interest for May is now down to a very tiny 506 contracts... so it's doubtful that there will be any delivery problems in silver.
The Comex Delivery Report showed that 3 gold and 279 silver contracts were put up for delivery on Monday. The Bank of Nova Scotia and Prudential were the big issuers in silver. The biggest four stoppers were the '4 or less' traders. The action is linked here.
Talking about action... there was lots of it at both GLD and SLV yesterday. The GLD ETF took in a whopping 636,105 ounces of gold... 19.8 tonnes! That's a big, big number! Not to be outdone, the good folks over at SLV had a big increase as well... this time to the tune of 2,205,509 troy ounces. I would guess that they're getting this directly from the refiners... and we may see several more days of big increases like this one.
The U.S. Mint also had some sales to report on Thursday. One-ounce gold eagles sales were up another 7,000... 24-K gold buffaloes were up another 7,000 as well... and silver eagles were up another 317,500. Month-to-date, one-ounce gold eagle sales are 24,500, gold buffaloes 20,500... and silver eagles 722,500.
The Comex-approved depositories reported a minor withdrawal of only 2,000 ounces on Wednesday.
For such a big up day in gold yesterday, I only have two gold-related story. Eric King interviewed the legendary Jim Sinclair about the goings-on in the gold market on Thursday. The interview is imbedded in a GATA release which gives an executive summary of what's contained in the 12-minute audio interview. The headline reads "Physical market has smashed gold paper, Sinclair tells King World News"... and the link is here.
The second gold-related story comes from GoldMoney founder and GATA consultant James Turk. He examines housing prices through a gold lens to reclaim, for gold, its historic status as the best measure of prices generally. Turk's commentary is headlined "An Interesting Perspective on House Prices" and you can find it posted at goldmoney.com... and the link is here.
Most of my stories today [and I have a lot of them] are about the ongoing international sovereign debt crisis that's spreading like Ebola... what caused yesterday's market melt-down in the Dow... and the latest on Goldman Sachs.
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Learn more here.
First, let's talk about the market melt-down yesterday. There were a lot of stories about a bad trade in Proctor and Gamble... plus a few other speculations that were rather off the wall. The person most qualified to speak to what happened yesterday is the proprietor over at zerohedge.com. He knows Wall Street inside out, upside down, and sideways... as he was one of them not that long ago. In a rather longish post headlined "The Day the Market Almost Died: Courtesy of High-Frequency Trading"... Tyler Durden lays it all out. He writes... "Today, we have reached an apex in our quest to prevent the HFT "Black Monday" juggernaut, as absent the last minute intervention of still unknown powers, the market, for all intents and purposes, broke. Liquidity disappeared." This is a must read from one end to the other... and I thank Australian reader Wesley Legrand for bringing it to my attention... and now to yours. The link is here.
As Tyler Durden mentioned in his post, the NASDAQ's reaction to what happened was rather alarming. In this Bloomberg story [sent to me by Florida reader P.S.] the headline reads "Nasdaq to Cancel All Trades of Stocks Moving More Than 60%". Florida reader S.A. was incensed by this... "What? Exchanges decide what are, and are not, confirmed trades in markets? What may be the ruinous effects on some of those whose trades are cancelled?" Indeed. The link to the story is here.
The next story is from Greece... and it's rather disturbing. It's posted over at france24.com... and the headline reads "President slams protests, warns nation is on 'brink of abyss'". The Molotov cocktails are flying and three people are dead. I thank reader Roy Stephens for sending the story along... and the link is here.
This next item is one that I 'borrowed' from yesterday's King Report. It's a story posted over at Bloomberg's businessweek.com. "Bundesbank President Axel Weber fired the first shot in a brewing debate over how far the European Central Bank should go to defend the euro... rebuffing calls for the ECB to consider buying government bonds." Buying bonds is monetizing debt and printing money, dear reader. Germans of Weber's vintage still think about Weimar Germany... and want no part of it. But, as I keep saying... it's either "print, or die". Death by a deflationary depression... or death by a hyperinflationary depression... which will he chose? The story... headlined "Weber Draws Battle Lines as Pressure Mounts on ECB"... is a bit of read, but I think it's worth your while... and the link is here.
This next piece is also about Germany. It's courtesy of Florida reader P.S... and it's posted over at the Financial Times in London. All is not well over there... and this story pulls back the curtain a bit for you to see that Germany has its own set of problems that are just as bad. The headline reads "The message from Berlin that Europe failed to grasp." Like the previous story about Germany, I think this is also worth the read... and the link is here.
Here's a story that was filed at cnbc.com shortly after the markets closed yesterday. The headline does not make for happy reading... "US Banks Heavily Exposed to Europe Debt Woes". "The five biggest banks in the United States have a substantial risk to what's going on in Europe." How substantial, you ask... try $2.5 trillion! Dick Bove of Rochdale Securities told CNBC that "Greece will default because it has no other option." This is a short read, but a must read... and I thank Russian reader Alex Lvov for bringing it to my attention in the wee hours of this morning. The link is here.
The last two stories are both Goldman Sachs related. The first is by GATA board member Catherine Austin Fitts. Catherine has been walked the halls of power in Washington and is more than qualified to comment on "the great vampire squid". The story is headlined "Thumbing Down on Blankfein"... and it's an interesting read... and the link is here.
The second item about GS was posted over at calculatedrisk.com... and was sent to me by reader Dave Delve. Imagine the movie A Few Good Men. Imagine Lloyd Blankfein playing the role that Jack Nicholson played. Then his diatribe against the American people may have sounded like this... "You want the truth? You can't handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who's gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman's death, while tragic, probably saved the financial system. And that Goldman's existence, while grotesque and incomprehensible to you, saves pension funds. You don't want the truth. Because deep down, in places you don't talk about at parties, you want us to fill that investment gap. You need us to fill that gap. "We use words like credit default swaps, collateralized debt obligation, and securitization? We use these words as the backbone of a life spent investing in something. You use 'em as a punch line. We have neither the time nor the inclination to explain ourselves to a commoner who rises and sleeps under the blanket of the very credit we provide, and then questions the manner in which we provide it! We'd rather you just said thank you and paid your taxes on time. Otherwise, we suggest you get an account and start trading. Either way, we don't give a damn what you think you're entitled to!"
The danger is not that a particular class is unfit to govern. Every class is unfit to govern. – Lord Acton
Although I was very happy with gold's performance... as well as the shares... the non-confirmation by silver was ominous. As I mentioned yesterday, the jobs report comes out at 8:30 a.m. this morning... and 'da boyz' have a virtually unblemished record of hitting the gold and silver price at, or shortly before, the jobs numbers are released... either good, or bad. Will history repeat today? I don't know... but I'm always wary of the phrase "this time it's different."
To show you how far out of sync gold and silver are... the RSI in gold is pushing into overbought territory at 71.94... and silver's RSI is sucking wind at 46.33... which is closer to being over sold than overbought. Gold is way above it's 50-day moving average... and silver, for all intents and purposes, is sitting on it's 50-day moving average. The dichotomy could not be more striking. How this will resolve itself is unknown... but today's action in New York [which should be something to see] will tell us a lot.
Here's the 6-month gold chart...
And here's the 6-month silver chart...
For whatever reason, the CME has not updated their website [as of 5:37 a.m. Eastern time] with preliminary volume figures for Thursday's trading in either gold or silver. However, the usual New York gold commentator mentioned that the CME website showed 268,000 gold contracts traded as of 5:15 p.m. yesterday afternoon. That number does not surprise me... as I'm sure the U.S. bullion banks were all over the gold market yesterday afternoon trying to prevent a melt-up... and only partially succeeding. So the final volume figures [plus the open interest numbers] will probably be a sight to behold when they're posted later this morning.
London has already been open about three hours as I write this paragraph... and gold volume is already a monstrous 46,000 contracts traded... net of quite a few roll-overs. Silver has traded a chunky 6,000 contracts. This is quite amazing considering that the prices of these two metals have done virtually nothing since the close of New York trading at 5:30 p.m. yesterday afternoon... although gold is down about $10 at the moment. The dollar isn't doing much either.
Now we wait and see what happens in New York trading today.
I hope you have a good weekend... and I'll see you here tomorrow.
Ed Steer -
Casey Research May 7
Matt is right squarely on the dime....
GREED without limits is amoral...not civilized.
Produces chaos.
I agree Fabian and I am glad you posted it. Silver on TA is levitating (almost).So soon a great downward movement will arrive.Then,again silver should be a lot higher than it is now.
Gold at 1,224. is just ahead.Then a pullback.I am interested in your thoughts re silver at present.
thanks
'the problem is confined'......are you kidding -right?
GO Newly ! Was a Lutheran minister said that..in the last days of WWll in Germany.
First they went after the jews, then they went after the gypsies and intellectuals then the catholics now they come for me. And there is no one left to speak up for me. Or, to help me.
We are ALL under suspicion....terrorist or no terrorist. Not good.
Federal Reserve Must Disclose Bank Bailout Records (Update3)
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By David Glovin and Bob Van Voris
March 19 (Bloomberg) -- The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.
The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”
The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”
The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.
Right to Know
If today’s ruling is upheld or not appealed by the Fed, it will have to disclose the requested records.
“We’re obviously pleased with the court’s decision, which is an important affirmation of the public’s right to know what its government is up to,” said Thomas Golden, a partner at New York-based Willkie Farr & Gallagher LLP and Bloomberg’s outside counsel.
“We are reviewing the decision and considering our options for reconsideration or appeal,” said Fed spokesman David Skidmore.
The court was asked to decide whether loan records are covered by FOIA. Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets. The Board of Governors of the Federal Reserve System had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury.”
Payment Processors
The Clearing House Association, which processes payments among banks, joined the case and sided with the Fed. The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., US Bancorp and Wells Fargo & Co.
Oscar Suris, a spokesman for Wells Fargo, JPMorgan spokeswoman Jennifer Zuccarelli and RBS spokeswoman Linda Harper all declined to comment. Deutsche Bank spokesman Ronald Weichert couldn’t immediately comment.
Bloomberg, majority-owned by New York Mayor Michael Bloomberg, sued after the Fed refused to name the firms it lent to or disclose loan amounts or assets used as collateral under its lending programs. Most of the loans were made in response to the deepest financial crisis since the Great Depression.
Lawyers for Bloomberg argued in court that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money.
Wall of Secrecy
“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Golden wrote in court filings.
Banks and the Fed warned that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell- off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued.
Much of the debate at the appeals court argument on Jan. 11 centered on the potential harm to banks if it was revealed that they borrowed from the Fed’s so-called discount window. Matthew Collette, a lawyer for the government, said banks don’t do that unless they have liquidity problems.
FOIA requires federal agencies to make government documents available to the press and public. An exception to the statute protects trade secrets and privileged or confidential financial data. In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said the exception didn’t apply because there’s no proof banks would suffer.
Three-Part Test
In its opinion today, the appeals court said that the exception applies only if the agency can satisfy a three-part test. The information must be a trade secret or commercial or financial in character; must be obtained from a person; and must be privileged or confidential, according to the opinion.
The court said that the information sought by Bloomberg was not “obtained from” the borrowing banks. It rejected an alternative argument the individual Federal Reserve Banks are “persons,” for purposes of the law because they would not suffer the kind of harm required under the “privileged and confidential” requirement of the exemption.
In a related case, U.S. District Judge Alvin Hellerstein in New York previously sided with the Fed and refused to order the agency to release Fed documents that Fox News Network sought. The appeals court today returned that case to Hellerstein and told him to order the Fed to conduct further searches for documents and determine whether the documents should be disclosed.
Balance Sheet
The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009.
More than a dozen other groups or companies filed friend- of-the-court briefs. Those arguing for disclosure of the records included the American Society of News Editors and individual news organizations.
The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).
To contact the reporters on this story: David Glovin in New York at dglovin@bloomberg.net; Bob Van Voris in New York at vanvoris@bloomberg.net.
Last Updated: March 19, 2010 12:47 EDT
gold will be used as a currency standard. If anyone is interested- jsmineset.com.
There will be a correction soon-then way up.....it is a very volatile and very manipulated market.
For now anyway.
fois gras
Fabian, Your messages are most interesting and valuable.
However, I believe gold has recently, in the last month been noticed.
It is a small market. Out of 9 innings gold and mining shares are in the 5th inning.
Bottom of the 5th. Go to JSMineset.com
fois gras
Basser and Lee go to mineset.com and read what the great one says...
Re gold and interest rate hike..its another non- event.
Regarding protecting in a currency. Gold and silver are the currency for protection (and gain) ignore the volatility or
trade it.
fois gras
Im an ignoramus. On the computer. You are a champ!!
Thanks so much Basser.
fois
Thanks Basser...I goofed and didn't see your response..
Still Im getting july 31....I don't know what to do.
fois
Basserdan,
could you please post the link to Don Coxe....I can only get july 31 broadcast. Thank you-
fois gras
Basserdan, could you possibly post a link that works to get Don Coxe? I can only get July 31.
Thanks very much.
Fois gras
Lee, Pakistan first. Iran next or after. WW3 ??
Think what....then....
fois gras