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Fed. 14day RP + 6.00B [ SoFart
On Deck: 20B 7day, 6.25B 1day
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Don Coxe, Basic Points for October --
http://www.beearly.com/pdfFiles/BMO%20NB%20BP%20Oct%202007.pdf
Don Coxe, Basic Points for October --
http://www.beearly.com/pdfFiles/BMO%20NB%20BP%20Oct%202007.pdf
Came right up 4 me, btw Nice W@G !!
Beige Book ~ Full Text
Prepared at the Federal Reserve Bank of Dallas and based on information collected on or before October 5, 2007. This document summarizes comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
--------------------------------------------------------------------------------
Anecdotal reports from the Federal Reserve Banks suggest economic activity continued to expand in all Districts in September and early October but the pace of growth decelerated since August. Growth was similar to that observed in the last Beige Book in seven Districts--Atlanta, Boston, Chicago, Minneapolis, New York, Philadelphia and St. Louis. The economy grew at a slower rate in five Districts--Cleveland, Dallas, Kansas City, Richmond and San Francisco. The expansion was variously characterized as "moderate," "modest" and "mixed."
Consumer spending expanded, but reports were uneven and suggest growth was slower in September and early October than in August. The manufacturing and service sectors continued to expand, but growth weakened--mostly for products and services related to home construction and real estate transactions. Several manufacturing and service firms reported that weaker domestic demand was offset by strong sales to global markets.
Residential real estate markets continued to weaken, and most Districts reported additional declines in home sales, prices and construction. Financial institutions reported an increase in delinquencies and slight deterioration in credit quality. Lenders in many Districts tightened credit standards, particularly for real estate. The majority of reports indicated an increase in business lending but a decline or slower growth in consumer lending.
Activity in the energy industry is still robust but growth has slowed. Favorable agricultural conditions are contributing to a bumper crop throughout much of the country, but drought continues to hamper production in the southeast.
Contacts in a number of industries indicated a higher-than-usual degree of uncertainty about the outlook for economic activity. Many real estate contacts expect housing markets to remain subdued for several months. At firms without direct ties to real estate and construction, contacts are still wary that credit tightening and slowing construction might slow activity in their industry, but there is cautious optimism because few see much evidence of such spillovers at this time.
Job growth eased in some regions, but labor shortages were reported for many occupations in most Districts and are said to be restraining economic activity in some instances. Wages rose moderately except for workers in short supply, where sharp increases were reported for some positions. Upward pressure on input costs are reported in most Districts, but competitive pressures are restraining the ability to pass higher input costs to selling prices in many instances.
Consumer Spending and Tourism
Retail sales increased, but reports were uneven and suggest growth has softened. Sales were weak at department and discount stores and for furniture and other home durables. Purchases of electronics and luxury items remained solid. Unseasonably mild weather dampened apparel sales in some regions.
There appeared to be a high level of uncertainty about the outlook for retail sales, and a few Districts report that retailers have reduced inventories. Vehicle sales were weaker, but reports indicated that sales of fuel-efficient and used cars remained strong. Tourist activity was generally solid.
Manufacturing
Factory activity continued to expand, but reports suggested that growth has been dampened by declining output of products used in home construction. A few Districts noted that export demand for other products helped sustain growth. District reports indicated strong growth of sales for paper, steel, machine tools, agricultural machinery, energy equipment, electrical equipment, defense and aerospace, chemicals and health-related equipment.
The outlook for factory activity is uneven. Boston District contacts noted continued weakness in housing and possible negative spillovers from tight credit but point to export growth and new product development as sources of strength. Manufacturers in the Cleveland District anticipate production remaining at current levels or decreasing slightly. Factories in the Kansas City District cut inventory levels and expect further reductions. Automakers in the Chicago District anticipate weakness in auto sales, but the St. Louis District reports major hiring to support the opening of new facilities for motor vehicle parts manufacturing.
Services
Districts reporting on business services indicated the sector is in expansion but the strength varied. Temporary staffing firms reported increased hiring, with the exception of activity to support financial services and real estate. Shipping activity was mixed and suggests some softening. Container shipments and regional freight activity were softer in the Atlanta and New York Districts, but freight hauling and shipping firms in the Dallas District reported increases in volume. Dallas District airlines say traffic is steady and bookings are solid.
Construction and Real Estate
Home sales continued to fall or increased more slowly in most Districts. In some instances, buyers could no longer secure financing or were unable to sell their current homes. New home inventories remained elevated, and builders continued to curb new home construction. Rising inventories of existing homes added to uncertainty about the overall health of the housing market.
Commercial market fundamentals remained solid. Most Districts reported steady absorption of commercial space. Rental rates were firm to rising across Districts, with sizable increases for Manhattan office space. Construction activity continued at a steady pace overall. Some softness in commercial investment activity was noted, however, and several Districts reported a move to more conservative financing. Reports suggested developers are becoming more cautious--in some cases shelving or canceling projects.
Banking and Finance
District reports indicated increased delinquencies and a slight deterioration in credit quality. Lenders in many Districts tightened credit standards, including for consumers and all types of real estate. Consumer lending grew more slowly in most Districts. Lending for home mortgages, equity lines and refinancing continued to soften or decline in most Districts, which some reports attributed to tighter lending standards. Overall business lending was up, but tightening lending standards were applied, particularly for real estate.
Agriculture and Natural Resources
Favorable agricultural conditions in much of the country have allowed harvests to run ahead of normal schedules and contributed to above-average crop yields throughout much of the country. A near-record corn crop and above-average soybean yields are expected. Livestock producers reported strong demand and high prices.
Bumper crops have strained storage capacity and caused transportation problems. The Chicago District notes that transportation and storage problems emerged because of the size and speed of the harvest and because cash prices are enough lower than futures prices that farmers have an incentive to store crops until 2008.
Crop production has been hampered by dry or drought conditions in Alabama, the Carolinas, Georgia, Kentucky, Tennessee and Virginia. Shortages of feed and low forage supplies have led some livestock producers in these areas to cull their herds. The Chicago District reports that crop yields in Indiana, Michigan, and Wisconsin were less affected by a summertime drought than had been anticipated by some observers.
Energy activity held at robust levels, and oil production was up slightly. While natural gas drilling activity is still vigorous, there were reports that high costs have or will lead to reductions in production. The Kansas City and Minneapolis Districts reported that overall mining activity was strong and expanding, with mines in the Minneapolis District producing near capacity.
Labor Markets
Labor markets remain tight across much of the country, and there continues to be moderate upward pressure on wages and benefits. Job growth eased in some regions, however, and wage pressures softened.
Most Districts report worker shortages in a variety of occupations, with sizable wage increases for workers in short supply. Positions mentioned as difficult to fill include scientific, technical, accounting, finance, engineering, marketing, health-care, truckers, welders, ironworkers, crane operators, office workers and energy-service workers. Low-skilled and entry-level workers are in short supply in some areas, including those in the retail and hospitality industries.
Prices
Upward pressure on input costs was reported by most Districts. Pushed up by strong domestic and international demand, energy and raw material costs are characterized as high by several Districts. Prices are up for a broad range of foods, including milk, corn, soybeans, wheat, beef, chicken and vegetables. Declines in the value of the dollar and high shipping costs have made imported goods more expensive. Insurance costs have increased in the Atlanta District.
The ability to pass higher input costs to selling prices was mixed. Some manufacturers raised selling prices as a result of higher costs, such as for food products, chemicals, machinery and oil and gas equipment. But there were also reports of lower prices, particularly for construction-related materials, such as lumber, wood, wallboard and some metals, pushing down construction costs. Competitive pressures are restraining retail price increases in many instances. Prices are higher for food products and at restaurants. Vehicle prices are lower, with dealers using incentive and discount programs or manufacturers adding features to vehicles without raising prices. Reports from the service sector suggest there have been continued increases in fees and fuel surcharges, but the rate of increase has not changed.
Beige Book ~ Full Text
Prepared at the Federal Reserve Bank of Dallas and based on information collected on or before October 5, 2007. This document summarizes comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
--------------------------------------------------------------------------------
Anecdotal reports from the Federal Reserve Banks suggest economic activity continued to expand in all Districts in September and early October but the pace of growth decelerated since August. Growth was similar to that observed in the last Beige Book in seven Districts--Atlanta, Boston, Chicago, Minneapolis, New York, Philadelphia and St. Louis. The economy grew at a slower rate in five Districts--Cleveland, Dallas, Kansas City, Richmond and San Francisco. The expansion was variously characterized as "moderate," "modest" and "mixed."
Consumer spending expanded, but reports were uneven and suggest growth was slower in September and early October than in August. The manufacturing and service sectors continued to expand, but growth weakened--mostly for products and services related to home construction and real estate transactions. Several manufacturing and service firms reported that weaker domestic demand was offset by strong sales to global markets.
Residential real estate markets continued to weaken, and most Districts reported additional declines in home sales, prices and construction. Financial institutions reported an increase in delinquencies and slight deterioration in credit quality. Lenders in many Districts tightened credit standards, particularly for real estate. The majority of reports indicated an increase in business lending but a decline or slower growth in consumer lending.
Activity in the energy industry is still robust but growth has slowed. Favorable agricultural conditions are contributing to a bumper crop throughout much of the country, but drought continues to hamper production in the southeast.
Contacts in a number of industries indicated a higher-than-usual degree of uncertainty about the outlook for economic activity. Many real estate contacts expect housing markets to remain subdued for several months. At firms without direct ties to real estate and construction, contacts are still wary that credit tightening and slowing construction might slow activity in their industry, but there is cautious optimism because few see much evidence of such spillovers at this time.
Job growth eased in some regions, but labor shortages were reported for many occupations in most Districts and are said to be restraining economic activity in some instances. Wages rose moderately except for workers in short supply, where sharp increases were reported for some positions. Upward pressure on input costs are reported in most Districts, but competitive pressures are restraining the ability to pass higher input costs to selling prices in many instances.
Consumer Spending and Tourism
Retail sales increased, but reports were uneven and suggest growth has softened. Sales were weak at department and discount stores and for furniture and other home durables. Purchases of electronics and luxury items remained solid. Unseasonably mild weather dampened apparel sales in some regions.
There appeared to be a high level of uncertainty about the outlook for retail sales, and a few Districts report that retailers have reduced inventories. Vehicle sales were weaker, but reports indicated that sales of fuel-efficient and used cars remained strong. Tourist activity was generally solid.
Manufacturing
Factory activity continued to expand, but reports suggested that growth has been dampened by declining output of products used in home construction. A few Districts noted that export demand for other products helped sustain growth. District reports indicated strong growth of sales for paper, steel, machine tools, agricultural machinery, energy equipment, electrical equipment, defense and aerospace, chemicals and health-related equipment.
The outlook for factory activity is uneven. Boston District contacts noted continued weakness in housing and possible negative spillovers from tight credit but point to export growth and new product development as sources of strength. Manufacturers in the Cleveland District anticipate production remaining at current levels or decreasing slightly. Factories in the Kansas City District cut inventory levels and expect further reductions. Automakers in the Chicago District anticipate weakness in auto sales, but the St. Louis District reports major hiring to support the opening of new facilities for motor vehicle parts manufacturing.
Services
Districts reporting on business services indicated the sector is in expansion but the strength varied. Temporary staffing firms reported increased hiring, with the exception of activity to support financial services and real estate. Shipping activity was mixed and suggests some softening. Container shipments and regional freight activity were softer in the Atlanta and New York Districts, but freight hauling and shipping firms in the Dallas District reported increases in volume. Dallas District airlines say traffic is steady and bookings are solid.
Construction and Real Estate
Home sales continued to fall or increased more slowly in most Districts. In some instances, buyers could no longer secure financing or were unable to sell their current homes. New home inventories remained elevated, and builders continued to curb new home construction. Rising inventories of existing homes added to uncertainty about the overall health of the housing market.
Commercial market fundamentals remained solid. Most Districts reported steady absorption of commercial space. Rental rates were firm to rising across Districts, with sizable increases for Manhattan office space. Construction activity continued at a steady pace overall. Some softness in commercial investment activity was noted, however, and several Districts reported a move to more conservative financing. Reports suggested developers are becoming more cautious--in some cases shelving or canceling projects.
Banking and Finance
District reports indicated increased delinquencies and a slight deterioration in credit quality. Lenders in many Districts tightened credit standards, including for consumers and all types of real estate. Consumer lending grew more slowly in most Districts. Lending for home mortgages, equity lines and refinancing continued to soften or decline in most Districts, which some reports attributed to tighter lending standards. Overall business lending was up, but tightening lending standards were applied, particularly for real estate.
Agriculture and Natural Resources
Favorable agricultural conditions in much of the country have allowed harvests to run ahead of normal schedules and contributed to above-average crop yields throughout much of the country. A near-record corn crop and above-average soybean yields are expected. Livestock producers reported strong demand and high prices.
Bumper crops have strained storage capacity and caused transportation problems. The Chicago District notes that transportation and storage problems emerged because of the size and speed of the harvest and because cash prices are enough lower than futures prices that farmers have an incentive to store crops until 2008.
Crop production has been hampered by dry or drought conditions in Alabama, the Carolinas, Georgia, Kentucky, Tennessee and Virginia. Shortages of feed and low forage supplies have led some livestock producers in these areas to cull their herds. The Chicago District reports that crop yields in Indiana, Michigan, and Wisconsin were less affected by a summertime drought than had been anticipated by some observers.
Energy activity held at robust levels, and oil production was up slightly. While natural gas drilling activity is still vigorous, there were reports that high costs have or will lead to reductions in production. The Kansas City and Minneapolis Districts reported that overall mining activity was strong and expanding, with mines in the Minneapolis District producing near capacity.
Labor Markets
Labor markets remain tight across much of the country, and there continues to be moderate upward pressure on wages and benefits. Job growth eased in some regions, however, and wage pressures softened.
Most Districts report worker shortages in a variety of occupations, with sizable wage increases for workers in short supply. Positions mentioned as difficult to fill include scientific, technical, accounting, finance, engineering, marketing, health-care, truckers, welders, ironworkers, crane operators, office workers and energy-service workers. Low-skilled and entry-level workers are in short supply in some areas, including those in the retail and hospitality industries.
Prices
Upward pressure on input costs was reported by most Districts. Pushed up by strong domestic and international demand, energy and raw material costs are characterized as high by several Districts. Prices are up for a broad range of foods, including milk, corn, soybeans, wheat, beef, chicken and vegetables. Declines in the value of the dollar and high shipping costs have made imported goods more expensive. Insurance costs have increased in the Atlanta District.
The ability to pass higher input costs to selling prices was mixed. Some manufacturers raised selling prices as a result of higher costs, such as for food products, chemicals, machinery and oil and gas equipment. But there were also reports of lower prices, particularly for construction-related materials, such as lumber, wood, wallboard and some metals, pushing down construction costs. Competitive pressures are restraining retail price increases in many instances. Prices are higher for food products and at restaurants. Vehicle prices are lower, with dealers using incentive and discount programs or manufacturers adding features to vehicles without raising prices. Reports from the service sector suggest there have been continued increases in fees and fuel surcharges, but the rate of increase has not changed.
Fed. 1day RP + 6.25B [net sm drain -0.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 1day RP + 6.25B [net sm drain -0.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Japan's grannies drive up gold prices
By Ambrose Evans-Pritchard
Last Updated: 1:08am BST 17/10/2007
Gold has soared to a fresh 28-year high of $760 an ounce on fears of global currency disorder and a surge of buying by Japanese investors using exotic trading signals.
Traders report a sudden burst of activity on the TOCOM gold futures markets in Tokyo as the price breaks through the psychological barrier of 3,000 yen (£12.52) per gramme, the measure used by the Japanese to trade gold.
advertisement
The country's irrepressible grannies rely heavily on Ichimoku "cloud charts", multi-faceted indicators designed to give support/resistance levels in various markets, which have issued a powerful buy signal in recent days.
John Reade, head of precious metals at UBS, said the Japan can be a major driver of the gold price. "Japanese buying can come out of the blue, but it is too soon yet to tell whether they are about to take over the gold market," he said. "When the Japanese public move in with reckless abandon, everybody else gets out of the way. They can be the last to join the rally."
The fresh interest in gold comes as the yen renews its slide, hit by signs that the economy may be tipping back into deflation after the housing collapse during the summer. Housing starts fell 23.4pc in July and 43.4pc in August as new laws came into effect. The Bank of Japan has signalled that it will keep interest rates at 0.5pc for the foreseeable future, inviting funds to step up borrowing in Tokyo to chase higher yields elsewhere through the global "carry trade".
Rising inflation across China, India, the Middle East, eastern Europe and Latin America have all created the backdrop for a major move in gold. Citigroup said a global "reflation rally" caused by cuts in US interest rates could push prices above $1,000 an ounce.
UBS has upgraded its long-term forecast, but is cautious for now. "The net long positions on the US futures markets are at all-time highs. They have been at extreme levels for four weeks and when that happens you can be sure there will be a correction. It could be any time now," said Mr Reade. Read
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/16/cngold116.xml
Futures (2) + World Indices
http://www.cme.com/dta/del/globex.html
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
The US Gold Reserve is Now in Play
By: James Turk, The Freemarket Gold & Money Report
-- Posted Tuesday, 16 October 2007 | Digg This Article | Source: GoldSeek.com
Copyright © 2007 by James Turk. All rights reserved.
I have long suspected that the US Gold Reserve is being used by the gold cartel as a tool to help it try capping the gold price. See for example the April 23, 2001 press release by the Gold Anti-Trust Action Committee [ http://www.gata.org/node/4223 ] which refers to my then recently published article, “Behind Closed Doors”. The complete article is available at the following link: http://www.fgmr.com/clsddoor.htm
“Behind Closed Doors” provided compelling evidence that part of the US Gold Reserve had been swapped for gold in the Bundesbank. Gold was then removed from the Bundesbank’s vault and loaned into the market as part of the gold cartel’s price capping scheme.
We now have more evidence that all may not be well in Fort Knox. Many thanks go to Bill Rummel of Charleston, South Carolina for bringing the following to my attention.
The US Treasury quietly made a subtle change to its weekly reports of the US International Reserve Position, which includes the US Gold Reserve. This change was first made on May 14th. The differences can be seen by comparing the report’s old format release on May 8th to the new format used the following week. Here are the links:
http://www.treas.gov/press/releases/2007581342179779.htm http://www.treas.gov/press/releases/20075141738291821.htm
Note the additional description of gold provided in the new reporting format. It says the US Gold Reserve is 261.499 million ounces and importantly, that the gold is now reported “including gold deposits and, if appropriate, gold swapped” [emphasis added].
This description provides clear evidence that the US Gold Reserve is in play. Gold has been removed from US Treasury vaults and placed on deposit, presumably in the couple of bullion banks the Treasury has selected to assist with its gold price capping efforts.
Gold placed on deposit gets loaned out by these bullion banks, and then sold into the spot market to try capping the gold price. The same thing happens with swaps, but the vague language in the note to the Treasury reports makes it uncertain whether they are in fact being used at the moment.
It is noteworthy that this change of accounting occurred in May. Could it be that the gold cartel had to dip into the US Gold Reserve to accommodate the big gold buybacks of hedge books that Lihir and others completed at that time?
The timing is also conspicuous because it occurred about the time GLD, the exchange-traded fund, showed a reduction of 23 tonnes of metal. Did GLD need to borrow gold from the US Treasury to replenish its stock? This was also a period when large deliveries and exchange-for-physicals were taking place on the Comex.
What does it all mean?
My friend Bill Murphy, who is one of the co-founders of GATA and also the proprietor of www.lemetropolecafe.com, has been writing for weeks about the potential for what he calls a “Commercial Signal Failure”. In his last letter yesterday he wrote: “We are getting closer and closer to that Commercial Signal Failure, so long touted here. All that means is at some point various commercial shorts will not be able to hang with their positions due to mark-to-market losses. At that point they will be forced to cover, sending the price of gold even higher, maybe sharply.” I think this Commercial Signal Failure has begun.
This new evidence provided in the US Treasury report as well as the rising gold price itself suggest to me that we are now witnessing the last scramble by the gold cartel to cap the gold price. It is a vain attempt by them, acting under the instructions of the US Treasury, to make the world think the dollar is worthy of being the world’s reserve currency when in fact everyone knows that it is not.
In short, the wheel has fallen off the truck. The dollar is heading for a train wreck. Use whatever metaphor you want, but the message is clear – the dollar is in serious trouble.
Non-US investors already got the message. Bloomberg today reported that foreigners sold a record $69.3 billion in U.S. assets in August. Including short-term securities such as Treasury bills, they sold a net $163 billion. The flight out of dollar denominated assets is gaining momentum, and gold is one of the safest places to be in a currency collapse.
Now all we need to know is how much of the US Gold Reserve has the gold cartel already put at risk? And how much more of the US Gold Reserve will be put at risk before the US Treasury finally acknowledges reality?
______________________________________________________________________________
James Turk is the Founder & Chairman of GoldMoney.com. He is the co-author of The Coming Collapse of the Dollar.
-- Posted Tuesday, 16 October 2007 | Digg This Article |
W@G2 QQQQ 10/17/07 for a 10/19/07 close
53.98 bob3
52.87 DrWorm
Doc, yes it's ex week so not
as attentive as last week when l closed out....myself would be a better judge of this.
l'v been chasing other flyers this week....bb stock.
yep but they have held the Debt within
reason sofar & have plenty of new monopoly $$ since they have passed & funded the new limit.
todays drain will help the chart some but thursday 24b expires
& they are keeping more longer term with the addition of 7day lately.
Fed. 1day RP + 6.50B [net Drain -8.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 1day RP + 6.50B [net Drain -8.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Credit crunch will weigh on U.S. growth: Greenspan
Mon Oct 15, 2007 3:58pm EDT
WASHINGTON (Reuters) - The tightening of credit markets around the world will slow future U.S. economic growth even though credit conditions have improved, former Federal Reserve Chairman Alan Greenspan said on Monday.
"Even though the credit crunch is easing, it is residual," he said in an interview on CNBC television.
The impact tighter credit has had on borrowing costs "is going to slow this economy down to a certain extent," he said. The effects of that slowing are likely to last into the first quarter of 2008, Greenspan said.
Greenspan suggested that monetary policy-makers may need to give greater weight to the rising costs of energy and food products when looking at inflation.
Central bankers in the United States have tended to focus on measures of "core" inflation that exclude food and energy costs in assessing inflation because those prices are widely considered volatile.
"The notion of looking at a core price requires that energy and food have no long-term trend and that their fluctuations are essentially random. That is now becoming an increasingly questioned premise," Greenspan said.
http://www.reuters.com/article/ousivMolt/idUSWAT00827620071015
Bernanke: Housing Woes to Slow Growth
Monday October 15, 8:54 pm ET
By Jeannine Aversa, AP Economics Writer
Bernanke Says Housing Slump Will Probably Be a 'Significant Drag' on Economic Growth
WASHINGTON (AP) -- A deepening housing slump probably will be a "significant drag" on economic growth into next year and it will take time for Wall Street to fully recover from a painful credit crisis, Federal Reserve Chairman Ben Bernanke warned Monday.
Bernanke once again pledged to "act as needed" to help financial markets -- which have suffered through several months of turbulence -- function smoothly and to keep the economy and inflation on an even keel.
"Conditions in financial markets have shown some improvement since the worst of the storm in mid-August, but a full recovery of market functioning is likely to take time, and we may well see some setbacks," Bernanke said in a speech to the New York Economic Club. A copy of his remarks was made available in Washington.
It was Bernanke's most extensive assessment of the country's current economic situation since the August turmoil unhinged Wall Street.
The ultimate implications of the credit crunch on the broader economy, however, remain "uncertain," the Fed chief said.
Against that backdrop, Bernanke said the central bank will be closely watching the economy's vital signs in determining the Fed's next move. He didn't specifically commit to cutting rates again, but rather kept his options open.
Economists have mixed opinions on whether the Fed will lower interest rates at their next meeting, Oct. 30-31. Some insist the odds are lessening that the Fed will need to slice rates; Others, however, think rates will move lower.
"The Fed appears to be in watch mode at the present time," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.
To help cushion the economy from the ill effects of the credit crunch and housing slump, the Fed on Sept. 18 slashed a key short-term interest rate by one-half percentage point to 4.75 percent. It marked the first rate cut in more than four years. It also reflected the most aggressive action taken by the Fed to curb fallout from the credit crisis, which intensified in August.
Since that September meeting, the housing slump -- the worst in 16 years -- has gotten deeper, Bernanke said.
"The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year," he said.
"However, it remains too early to assess the extent to which household and business spending will be affected by the weakness in housing and the tightening in credit conditions," he added.
Spending by businesses and individuals is an important ingredient to keeping the economic expansion -- which began in late 2001 -- from fizzling out.
Developments affecting the job market and income growth also will be watched closely. "The labor market has shown some signs of cooling, but these are quite tentative so far, and real income is still growing at a solid pace," Bernanke observed.
The benefits of a mostly sturdy employment climate have helped cushion some of the negative effects that the housing slump, weaker home values and a credit crunch have had on consumers.
Job creation rebounded in September, with employers boosting payrolls by 110,000, the most in four months. Wages grew solidly. The unemployment rate did creep up to 4.7 percent last month but that rate is still considered low by historical standards.
Given all the problems faced by the economy, the economic performance so far this year "has been reasonably good," Bernanke said.
On the inflation front, Bernanke noted that the prices of crude oil and other commodities have been rising and that the value of the dollar has weakened. Oil prices galloped to a record high of $86.13 a barrel on Monday.
Bernanke said the Fed will continue to monitor inflation developments carefully. Yet, with the limited information seen since the central bank's September meeting, the inflation barometers "are consistent with continued moderate increases in consumer prices," he said.
Fielding questions after his speech, Bernanke said, "Part of the reason that we have some confidence in inflation remaining well controlled is we expect to see the economy growing more slowly at the end of this year" and early next year.
The Fed's September rate reduction, Bernanke said in his speech, has helped ease "some of the pressure in financial markets, although considerable strains remain." He said Fed policymakers were prepared to "reverse" the rate reduction if inflation turned out stronger than expected.
The Fed's next move will be determined by what is best for the economy, Bernanke suggested. As he has said previously, it is not the Fed's job to shield investors from the consequences of bad financial decisions.
"The truth is that it (the Fed) can hardly insulate investors from risk, even if it wished to do so," Bernanke said. "Developments over the past few months reinforce this point. Those who made bad investment decisions lost money."
The worst carnage has affected investors in "subprime" mortgages -- those made to people with spotty credit or low incomes. Some lenders have been forced out of business and some investors in those and related mortgage-backed securities have taken a huge financial hit.
Asked about what financial or economic information he would like to have but doesn't, Bernanke responded, "I'd like to know what those damn things are worth," referring in general to complicated financial instruments that repackaged debt -- bad debt, in some cases.
Overstretched homeowners with subprime loans got clobbered by the mortgage meltdown, too. Foreclosures and late payments have soared.
Weaker home prices seen during the housing bust have made it more difficult for some subprime borrowers to refinance out of loans that offered low "teaser" rates but jumped to much higher rates, resulting in payment shocks. Delinquencies on these mortgages are expected to rise further, Bernanke predicted.
AP Business Writer Tim Paradis in New York contributed to this report
http://biz.yahoo.com/ap/071015/bernanke.html
EZ, MMG + 0.36 @ 3.52 )
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Fed. 1day RP + 14.75B [net add + 7.25B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 1day RP + 14.75B [net add + 7.25B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Gold: Live Book ( 100oz )
http://www.cbot.com/cbot/pub/page1/1,3248,248,00.html
W@G1 QQQQ 10/15/07 for a 10/17/07 close
53.98 bob3
53.53 DrWorm
52.36 rayrohn
51.92 frenchee
Chapman: Gold, Silver, Economy & More
by Bob Chapman
The International Forecaster
Sunday, 14 October 2007
US MARKETS
America’s mortgage crisis is going to get considerably worse because of the level of fraudulent lending by mortgage originators and banks is much higher than previously estimated and we predicted. Defaults on subprime mortgages will continue to soar for another 18 months as unqualified mortgage holders struggle to meet their repayments, and tightening credit markets make ARM resets impossible. Our projection for economic growth in 2007 is 2% and zero to 1% in 2008. Thus, as unemployment rises more panic will ensue. Our big question is if governments tell us there has been so much fraud, why haven’t they brought criminal charges against lenders? The answer is if they do the world will find out that the Fed and our government encouraged the fraudulent lending – that is why. Then we will have to indict the people who approved and sanctioned such actions, such as Sir Alan Greenspan and our President.
In August foreclosures jumped 115% to 243,947 yoy, or one in 510 households of which about 40% end in forced sale or repossession. As this takes place house prices fall exacerbating the situation.
In the Dallas-Ft. Worth area, new housing projects fell 30% during the third quarter yoy and sales of new homes fell 20% with homes under $200,000 seeing the biggest decline. Cargo containers coming into US ports were supposed to set a record this year, but in reality imports are shrinking, off 1.4%.
The average vacancy rate in strip malls stands at 7.3% as of 6/30/07, and is expected to rise to 7.6% by yearend, the highest level since 1935.
The US Treasury 2007 budget deficit reported in at $162.8 billion as of 9/30 and the prior deficit was revised to $248.2 billion from $247.7 billion.
Home foreclosures doubled in September yoy at 223,538, including default and auction notices and bank repossessions, an 8% decline in August. California led the way with 51,259 and Florida was second with 33,354. That is one for every 557 households.
The Business Council and Conference Board found that 44.3% of 61 top CEO’s forecast economic conditions in their own industry would get worse over the next six months, while 16.4% see improvement. Thirty-nine percent see conditions unchanged; 24.4% saw worsening conditions, while 60% saw conditions staying the same.
Countrywide funded 44% fewer mortgage loans in September, while delinquencies increased and foreclosures doubled. They cut 4,935 jobs last month, leaving them with 55,932. They will cut 12,000 jobs, or 20% by December.
What the public is finally starting to realize is that inflation is a deliberate policy that will go on endlessly. People now looking for a crunch-up boom and soon everyone will want to swap dollars for real goods, no matter whether they need them or not. The idea is to get rid of the fiat currency. This happened to the continental currency of 1781 and to the French mandates territoriaux in 1796, and with the German marks in 1923.
September import price index increases were 1% mom and 5.2% yoy. This is inflationary as our government and the Fed members tell us they see no import price inflation.
The trade deficit narrowed to -$57.59 billion in August from a -$59.25 billion in July. That was down 2.4%.
Jobless clams fell 12,000 to 308,000.
Downey Financial, the California S&L fell the most in six years and the S&L said overdue home mortgages caused an operating loss as the state’s house prices showed the biggest loss in 15 years.
Excluding a 5.4% gain in imported petroleum prices, import prices fell 0.2% last month. We do not believe these Labor Department figures.
Export prices rose 0.3% after rising 0.2% in August, as agricultural prices gained 4.1%, the largest rise in a year. There was a 1.4% drop in material prices.
Countrywide said late payments rose, foreclosures doubled and new loans fell 44%. Overdue loans increased to 5.85% in September from 4.04% yoy. Foreclosures climbed 1.27% from 0.51%. Mortgages funded fell to $21 billion.
Delinquencies rose 0.8% in September mom Their servicing portfolio of $1.46 trillion, is almost 15% of the total US home-loan debt. The company has needed an infusion of $14 billion in August and September because they cannot access the commercial paper market.
Beazer Homes will restate earnings back to 1999 after a fraud investigation found its mortgage unit violated federal regulations. It will cost the company $15 million.
The HUD program for non-profits like Ameri Dream that funded down payments for low and middle-income homebuyers and was reimbursed by the sellers of the homes has ended. As we predicted it led to higher house prices and more foreclosures. It was used by more than 100,000 buyers last year.
Mattel shareholders have filed a derivative lawsuit alleging that the company regularly delayed contacting federal regulators about possible defects in its toys after learning about problems, some of which date back into the 1990s. Since August Mattel has had three recalls of 21 million toys.
GOLD, SILVER, PLATINUM, PALADIUM AND URANIUM
The cartel is now caught between the Devil and the deep blue sea. They have tried everything to suppress the PM's (precious metals). Their futile, manipulative weapons have included hundreds of tons of central bank gold sales, hundreds of thousands of shorts in the futures markets, tens of thousands of calls on the USDX, rally-crash protective derivative blow-offs, carry trade unwinding and market crashes to produce PM liquidations, gold leasing to fund gold-hedging producers and to cover short positions off market that is out of control to the point where lease rates are at much higher levels than usual and central banks are afraid they will never see their gold again, naked shorting of millions of shares of stocks in the resource sector, constant deceptive jawboning and blatantly fraudulent economic statistics, relentless attacks on oil and other commodities on a 24/7 basis, execution of the gold suppressive Washington Agreement to bail out lease positions off market and to give the central banks an excuse to sell gold, always at just the right time, and the creation of oodles of phantom paper gold to make it look like they have some 30,000 tonnes of actual, physical gold reserves when they only have perhaps 5,000 tonnes, if they are lucky. And after all this, their efforts have this week produced a fresh 28-year high spot gold price of 753.65, a fresh 28-year high of the leading (December) gold futures contract of 759.30 intra-day and 756.70 at closing, a fresh all-time high for the XAU of 182.36 intra-day and 179.04 at closing, and a fresh all-time high for the HUI of an astounding 423.16 intra-day and 413.34 at closing. Now if that is what the cartel calls "suppression," PLEASE GIVE US MORE!!!
This state of affairs may explain the unconfirmed news reports in which several bullish gold traders doing business in Manhattan have alleged that a rather large and inexplicably airborne kitchen sink, which they suspect was probably from the executive lunchroom of some bullion bank, crashed into one of the COMEX gold pits, narrowly missing the traders as they ducked at the last second to avoid being hammered by the flying sink, which they thought might be some sort of newfangled gold bullion reserve. However, no gold was found in any portion of the sink, and several traders indicated that the lack of gold was most likely a sign of central bank involvement. Police are now checking the model numbers on the fixtures to see if they can find a match so they can narrow down their rather large list of suspects. This was probably a last desperate measure by the hapless commercial shorts to take out the gold bulls. We take this to mean they have run out gold and had nothing left but the kitchen sink to trade with. What a pathetic situation.
Thursday was a day to remember, where the best laid plans of cartels and men went wildly astray. Just as we predicted, the cartel went on a mission to destroy the protective derivatives of the large specs by rallying the stock markets just before the expiration of October stock index options, the objective being to drain the value out of their stock index puts and then immediately crash the markets on them while they were stripped of their puts, forcing them to liquidate their PM positions. Things were going "great guns" for the cartel, which managed to push the Dow up to within a few points of 14,200 on mixed news, when they noticed that they had, well, somewhat of a problem. The problem was that some of the liquidity they provided to propel the stock markets had wisely found its way to the gold and silver pits just as we predicted it might, causing the PM's to convert to a fiery hot plasma state consisting of blazing gold and silver ions which threatened to vaporize the cartel and its astonished commercial shorts. As the Dow neared 14,200, with all the bad news behind it, gold had suddenly gone ballistic, shooting past its previous 28-year high like it was not even worth a look, and the gold futures markets, the XAU and the HUI were right behind it, setting their own records as stated above, smokin' like the Roadrunner as the dumbfounded Coyote (cartel) stared at them with its jaw hanging on the floor, totally stunned at their brashness.
OOPS AGAIN!!!
Well, the cartel had no alternative but to abort its plan, and immediately pulled the plug on the once rising stock markets, as the Dow, for no apparent reason, except to those who understand the gold market, sank over 200 points, briefly dipping below 14,000 just before recovering to just over 14,000. This stopped trading in all the markets dead in its tracks and everything started to pull back, including the dollar. Despite the huge hit, gold stubbornly closed above its previous high of 747.75 on both Thursday and Friday and the XAU and HUI followed suit. The large specs are really hanging tough. They've grabbed onto this bull market like a bulldog and are not about to let it go. The previous high for gold has now become support as we move on to the next level. We can not help but suspect that some sort of a signal failure may have occurred among the dazed members of the cartel which caused the PM's and their stocks to fly, but do not sell the large specs short on this as they may have had a few tricks of their own up their sleeves which propelled PM's and which later tanked the stock markets. We hope they have been reading the IF thoroughly so they are prepared for everything the cartel is going to throw at them. Their focus on the physical gold pits and the PM stocks is both wise and cunning, and is a winning-strategy, which they should continue throughout this rally.
So does this mean the cartel if finished with their plans for a rally-crash hit on gold? Don't you believe it, not for one second! The rally-crash scenario may be the only thing that now stands between commercial shorts and financial oblivion, so do not think they will give this weapon up that easily. A mountain of shorts, which is evidenced by yet another all-time high of open interest in gold futures on the COMEX, a mind-blowing 475,644 contracts as of Thursday, hangs over the heads of the commercial shorts like a Sword of Damocles, ready to lop off their heads if they make one more false move. Another move like they made on Thursday and it will be hallelujah time for gold and silver bulls. The Indian wedding season is about to peak, so it is now or never for the cartel. And if the Fed wants to lower rates in October to continue the bailout of their buddies on Wall Street, they will be unable to do so unless gold is reined in, so the battle in the gold pits will now quickly reach a crescendo as bullets of sweat appear on cartel member foreheads. Pills of nitro are now in short supply at pharmacies near Wall Street.
We said they would try to go to 14,300 Friday, but that they might ignite gold in the process and have to back off, and that is exactly what happened. They got to within 100 points of that goal with a whole trading day remaining and would have reached 14,300 had not gold and silver foiled their plans. We said the yen would go to 118 to 120 yen per dollar and to 169+ yen per euro, and we have already seen the yen at 117.71 yen per dollar and 167.478 yen per euro with virtually a whole week left to go, and you can count on a continued weakening of the yen to support stock markets as the cartel attempts a continuation of its plans. We believe that it is quite possible, perhaps even probable, that the cartel will now attempt to complete their plan by taking a new tack. They will run the stock markets up mildly on Monday and Tuesday, perhaps 80 points each day, and then will try to ignite the stock markets on the two days prior to the expiration of the options, perhaps adding as much as 300 points more, taking the Dow to the 14,600 area just as we originally suggested, with an almost immediate crash of the markets following thereafter. You already saw this plan in action on Friday, as the Dow gained about 78 points. They will pound PM's and their stocks while they push the rest of the stock market sectors up. Also, oil and commodities will get hit and the dollar will get support while this is happening. The yen will be weakened as just stated in support. Large specs should continue to get out of short-term, leveraged stock index puts and yen calls, trading them in for un-leveraged, longer-term positions unless they plan on selling into the cartel-created strength and protecting their derivatives with a general market sell-off which we think would be risky simply because the cartel has an unlimited supply of money. The cartel does not, however, have an unlimited supply of gold, and this is their Achilles heel. Large specs should continue loading up on un-leveraged, long-term, stock index puts and yen calls as the stock markets climb, adding daily, with volume increasing at a pace that matches the upward movement of the stock markets. If the cartel then crashes the market, you know what to do. And if they do not crash the markets right away, do not let your guard down, and do not leverage yourselves to the hilt while the rally is in progress. Stay conservative with your stock holdings, and continue to pound the cartel mercilessly with physical gold, secure in your un-leveraged, long-term, protective derivatives if the stock markets turn downward. As we stated before - SHOW NO MERCY!!!
http://news.goldseek.com/InternationalForecaster/1192386900.php
Chapman: Gold, Silver, Economy & More
by Bob Chapman
The International Forecaster
Sunday, 14 October 2007
US MARKETS
America’s mortgage crisis is going to get considerably worse because of the level of fraudulent lending by mortgage originators and banks is much higher than previously estimated and we predicted. Defaults on subprime mortgages will continue to soar for another 18 months as unqualified mortgage holders struggle to meet their repayments, and tightening credit markets make ARM resets impossible. Our projection for economic growth in 2007 is 2% and zero to 1% in 2008. Thus, as unemployment rises more panic will ensue. Our big question is if governments tell us there has been so much fraud, why haven’t they brought criminal charges against lenders? The answer is if they do the world will find out that the Fed and our government encouraged the fraudulent lending – that is why. Then we will have to indict the people who approved and sanctioned such actions, such as Sir Alan Greenspan and our President.
In August foreclosures jumped 115% to 243,947 yoy, or one in 510 households of which about 40% end in forced sale or repossession. As this takes place house prices fall exacerbating the situation.
In the Dallas-Ft. Worth area, new housing projects fell 30% during the third quarter yoy and sales of new homes fell 20% with homes under $200,000 seeing the biggest decline. Cargo containers coming into US ports were supposed to set a record this year, but in reality imports are shrinking, off 1.4%.
The average vacancy rate in strip malls stands at 7.3% as of 6/30/07, and is expected to rise to 7.6% by yearend, the highest level since 1935.
The US Treasury 2007 budget deficit reported in at $162.8 billion as of 9/30 and the prior deficit was revised to $248.2 billion from $247.7 billion.
Home foreclosures doubled in September yoy at 223,538, including default and auction notices and bank repossessions, an 8% decline in August. California led the way with 51,259 and Florida was second with 33,354. That is one for every 557 households.
The Business Council and Conference Board found that 44.3% of 61 top CEO’s forecast economic conditions in their own industry would get worse over the next six months, while 16.4% see improvement. Thirty-nine percent see conditions unchanged; 24.4% saw worsening conditions, while 60% saw conditions staying the same.
Countrywide funded 44% fewer mortgage loans in September, while delinquencies increased and foreclosures doubled. They cut 4,935 jobs last month, leaving them with 55,932. They will cut 12,000 jobs, or 20% by December.
What the public is finally starting to realize is that inflation is a deliberate policy that will go on endlessly. People now looking for a crunch-up boom and soon everyone will want to swap dollars for real goods, no matter whether they need them or not. The idea is to get rid of the fiat currency. This happened to the continental currency of 1781 and to the French mandates territoriaux in 1796, and with the German marks in 1923.
September import price index increases were 1% mom and 5.2% yoy. This is inflationary as our government and the Fed members tell us they see no import price inflation.
The trade deficit narrowed to -$57.59 billion in August from a -$59.25 billion in July. That was down 2.4%.
Jobless clams fell 12,000 to 308,000.
Downey Financial, the California S&L fell the most in six years and the S&L said overdue home mortgages caused an operating loss as the state’s house prices showed the biggest loss in 15 years.
Excluding a 5.4% gain in imported petroleum prices, import prices fell 0.2% last month. We do not believe these Labor Department figures.
Export prices rose 0.3% after rising 0.2% in August, as agricultural prices gained 4.1%, the largest rise in a year. There was a 1.4% drop in material prices.
Countrywide said late payments rose, foreclosures doubled and new loans fell 44%. Overdue loans increased to 5.85% in September from 4.04% yoy. Foreclosures climbed 1.27% from 0.51%. Mortgages funded fell to $21 billion.
Delinquencies rose 0.8% in September mom Their servicing portfolio of $1.46 trillion, is almost 15% of the total US home-loan debt. The company has needed an infusion of $14 billion in August and September because they cannot access the commercial paper market.
Beazer Homes will restate earnings back to 1999 after a fraud investigation found its mortgage unit violated federal regulations. It will cost the company $15 million.
The HUD program for non-profits like Ameri Dream that funded down payments for low and middle-income homebuyers and was reimbursed by the sellers of the homes has ended. As we predicted it led to higher house prices and more foreclosures. It was used by more than 100,000 buyers last year.
Mattel shareholders have filed a derivative lawsuit alleging that the company regularly delayed contacting federal regulators about possible defects in its toys after learning about problems, some of which date back into the 1990s. Since August Mattel has had three recalls of 21 million toys.
GOLD, SILVER, PLATINUM, PALADIUM AND URANIUM
The cartel is now caught between the Devil and the deep blue sea. They have tried everything to suppress the PM's (precious metals). Their futile, manipulative weapons have included hundreds of tons of central bank gold sales, hundreds of thousands of shorts in the futures markets, tens of thousands of calls on the USDX, rally-crash protective derivative blow-offs, carry trade unwinding and market crashes to produce PM liquidations, gold leasing to fund gold-hedging producers and to cover short positions off market that is out of control to the point where lease rates are at much higher levels than usual and central banks are afraid they will never see their gold again, naked shorting of millions of shares of stocks in the resource sector, constant deceptive jawboning and blatantly fraudulent economic statistics, relentless attacks on oil and other commodities on a 24/7 basis, execution of the gold suppressive Washington Agreement to bail out lease positions off market and to give the central banks an excuse to sell gold, always at just the right time, and the creation of oodles of phantom paper gold to make it look like they have some 30,000 tonnes of actual, physical gold reserves when they only have perhaps 5,000 tonnes, if they are lucky. And after all this, their efforts have this week produced a fresh 28-year high spot gold price of 753.65, a fresh 28-year high of the leading (December) gold futures contract of 759.30 intra-day and 756.70 at closing, a fresh all-time high for the XAU of 182.36 intra-day and 179.04 at closing, and a fresh all-time high for the HUI of an astounding 423.16 intra-day and 413.34 at closing. Now if that is what the cartel calls "suppression," PLEASE GIVE US MORE!!!
This state of affairs may explain the unconfirmed news reports in which several bullish gold traders doing business in Manhattan have alleged that a rather large and inexplicably airborne kitchen sink, which they suspect was probably from the executive lunchroom of some bullion bank, crashed into one of the COMEX gold pits, narrowly missing the traders as they ducked at the last second to avoid being hammered by the flying sink, which they thought might be some sort of newfangled gold bullion reserve. However, no gold was found in any portion of the sink, and several traders indicated that the lack of gold was most likely a sign of central bank involvement. Police are now checking the model numbers on the fixtures to see if they can find a match so they can narrow down their rather large list of suspects. This was probably a last desperate measure by the hapless commercial shorts to take out the gold bulls. We take this to mean they have run out gold and had nothing left but the kitchen sink to trade with. What a pathetic situation.
Thursday was a day to remember, where the best laid plans of cartels and men went wildly astray. Just as we predicted, the cartel went on a mission to destroy the protective derivatives of the large specs by rallying the stock markets just before the expiration of October stock index options, the objective being to drain the value out of their stock index puts and then immediately crash the markets on them while they were stripped of their puts, forcing them to liquidate their PM positions. Things were going "great guns" for the cartel, which managed to push the Dow up to within a few points of 14,200 on mixed news, when they noticed that they had, well, somewhat of a problem. The problem was that some of the liquidity they provided to propel the stock markets had wisely found its way to the gold and silver pits just as we predicted it might, causing the PM's to convert to a fiery hot plasma state consisting of blazing gold and silver ions which threatened to vaporize the cartel and its astonished commercial shorts. As the Dow neared 14,200, with all the bad news behind it, gold had suddenly gone ballistic, shooting past its previous 28-year high like it was not even worth a look, and the gold futures markets, the XAU and the HUI were right behind it, setting their own records as stated above, smokin' like the Roadrunner as the dumbfounded Coyote (cartel) stared at them with its jaw hanging on the floor, totally stunned at their brashness.
OOPS AGAIN!!!
Well, the cartel had no alternative but to abort its plan, and immediately pulled the plug on the once rising stock markets, as the Dow, for no apparent reason, except to those who understand the gold market, sank over 200 points, briefly dipping below 14,000 just before recovering to just over 14,000. This stopped trading in all the markets dead in its tracks and everything started to pull back, including the dollar. Despite the huge hit, gold stubbornly closed above its previous high of 747.75 on both Thursday and Friday and the XAU and HUI followed suit. The large specs are really hanging tough. They've grabbed onto this bull market like a bulldog and are not about to let it go. The previous high for gold has now become support as we move on to the next level. We can not help but suspect that some sort of a signal failure may have occurred among the dazed members of the cartel which caused the PM's and their stocks to fly, but do not sell the large specs short on this as they may have had a few tricks of their own up their sleeves which propelled PM's and which later tanked the stock markets. We hope they have been reading the IF thoroughly so they are prepared for everything the cartel is going to throw at them. Their focus on the physical gold pits and the PM stocks is both wise and cunning, and is a winning-strategy, which they should continue throughout this rally.
So does this mean the cartel if finished with their plans for a rally-crash hit on gold? Don't you believe it, not for one second! The rally-crash scenario may be the only thing that now stands between commercial shorts and financial oblivion, so do not think they will give this weapon up that easily. A mountain of shorts, which is evidenced by yet another all-time high of open interest in gold futures on the COMEX, a mind-blowing 475,644 contracts as of Thursday, hangs over the heads of the commercial shorts like a Sword of Damocles, ready to lop off their heads if they make one more false move. Another move like they made on Thursday and it will be hallelujah time for gold and silver bulls. The Indian wedding season is about to peak, so it is now or never for the cartel. And if the Fed wants to lower rates in October to continue the bailout of their buddies on Wall Street, they will be unable to do so unless gold is reined in, so the battle in the gold pits will now quickly reach a crescendo as bullets of sweat appear on cartel member foreheads. Pills of nitro are now in short supply at pharmacies near Wall Street.
We said they would try to go to 14,300 Friday, but that they might ignite gold in the process and have to back off, and that is exactly what happened. They got to within 100 points of that goal with a whole trading day remaining and would have reached 14,300 had not gold and silver foiled their plans. We said the yen would go to 118 to 120 yen per dollar and to 169+ yen per euro, and we have already seen the yen at 117.71 yen per dollar and 167.478 yen per euro with virtually a whole week left to go, and you can count on a continued weakening of the yen to support stock markets as the cartel attempts a continuation of its plans. We believe that it is quite possible, perhaps even probable, that the cartel will now attempt to complete their plan by taking a new tack. They will run the stock markets up mildly on Monday and Tuesday, perhaps 80 points each day, and then will try to ignite the stock markets on the two days prior to the expiration of the options, perhaps adding as much as 300 points more, taking the Dow to the 14,600 area just as we originally suggested, with an almost immediate crash of the markets following thereafter. You already saw this plan in action on Friday, as the Dow gained about 78 points. They will pound PM's and their stocks while they push the rest of the stock market sectors up. Also, oil and commodities will get hit and the dollar will get support while this is happening. The yen will be weakened as just stated in support. Large specs should continue to get out of short-term, leveraged stock index puts and yen calls, trading them in for un-leveraged, longer-term positions unless they plan on selling into the cartel-created strength and protecting their derivatives with a general market sell-off which we think would be risky simply because the cartel has an unlimited supply of money. The cartel does not, however, have an unlimited supply of gold, and this is their Achilles heel. Large specs should continue loading up on un-leveraged, long-term, stock index puts and yen calls as the stock markets climb, adding daily, with volume increasing at a pace that matches the upward movement of the stock markets. If the cartel then crashes the market, you know what to do. And if they do not crash the markets right away, do not let your guard down, and do not leverage yourselves to the hilt while the rally is in progress. Stay conservative with your stock holdings, and continue to pound the cartel mercilessly with physical gold, secure in your un-leveraged, long-term, protective derivatives if the stock markets turn downward. As we stated before - SHOW NO MERCY!!!
http://news.goldseek.com/InternationalForecaster/1192386900.php
Don Coxe: weekly audio program. [ Oil Sands ]
http://events.startcast.com/events/199/B0003/#
Don speaks to GeoPoly report increasing royalty payments, seems a battle forming Calgary & Alberta with Grandfathered basis.
Don is PO'd....
27min run time.
AmateurInvestors: Cup/handle [ HUI ]
FRom another board:
Finally for those watching Gold the Gold Index (HUI) broke out of its small 2 week Handle this week after forming a Cup. I would have preferred to see the HUI develop a longer duration Handle before breaking out much like occurred in late 2005 when the HUI developed an 8 week Handle (point A) which was followed by a substantial move higher. It's going to be interesting to see if the HUI will follow through to the upside as it only developed a small 2 week Handle before breaking out this week.
Banks May Pool Billions to Stop Securities Sell-off
By ERIC DASH
Published: October 14, 2007
Several of the world’s biggest banks are in talks to put up about $75 billion in a backup fund that could be used to buy risky mortgage securities and other assets, a move designed to ease pressure on a crucial part of the credit markets that threatens the broader economy.
Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles. The meetings, which began three weeks ago, have been orchestrated by senior officials at the Treasury Department, and the discussions have intensified in the last few days.
A broad framework for an agreement could be reached as early as tomorrow, according to people with knowledge of the discussions, but many important details still need to be hammered out. Another round of discussions is taking place this weekend, and it is still possible that the parties will not reach an agreement.
“Treasury is very serious about getting some solution in place to take away the fear hanging over the markets,” said Alex Roever, a credit analyst at JPMorgan Chase who has been following the discussions but is not involved in them. “It is a very challenging thing to do. There are so many parties involved and they all don’t agree.
The proposal echoes the 1998 bailout of the hedge fund Long Term Capital Management, when a group of big banks came together to prevent the fund from collapsing after it made a series of bad bets. And the current round of crisis-driven collaboration illustrates the heightened level of concern among both government and financial players.
While there are signs that the broader credit markets have begun to stabilize after the Federal Reserve lowered interest rates last month, a pocket of the commercial paper market remains under siege: structured investment vehicles, known as SIVs. The fear is that problems with these vehicles could infect the broader economy.
SIVs, which issue short-term notes to invest in longer-term securities with higher yields, are often organized by banks but are not actually owned or held by them. They are supposed to be financed through the issuance of commercial paper backed by pools of home loans and credit card debt, but the loss of confidence in the quality of subprime mortgage bonds has also tainted these securities.
Analysts say that investors have all but stopped buying SIV-affiliated commercial paper, and the worry is that the 30 or so SIVs will unload billions of dollars of mortgage-related assets all at once. That would put intense pressure on prices. As Wall Street firms and hedge funds mark value of similar investments they held to their new lower values, they face potentially huge hits to their profits.
Still, the impact on the biggest banks is even more severe. In times of crisis, they are committed — either legally or to maintain their reputations — to stepping in to buy those securities. Banks have already been buying significant amounts of commercial paper in recent weeks, even though they did not have to. But if they are forced to bring those assets onto their balance sheets, they might be less willing to lend to businesses and consumers. That could set off a credit crunch and thrust the economy into a recession.
The proposal being floated calls for the creation of a “Super-SIV,” or a SIV-like fund fully backed by several of the world’s biggest banks to provide emergency financing. The Super-SIV would issue short-term notes to finance the purchase of assets held by the SIVs affiliated with the banks, with the hope of reassuring investors.
But whether the banks would buy the assets directly or just buy the short-term debt is still unclear, according to people briefed on the situation. So are other aspects, like the amount of capital each bank would need to contribute, how it would be administrated, and the fee structures and cost burdens.
The effort to create a backup fund began about three weeks ago, when the Treasury secretary, Henry M. Paulson, called a meeting in Washington that included the chief executives of Citigroup, Bank of America, JPMorgan and other big banks. With Wall Street firms having almost no luck finding buyers for mortgage-backed securities and derivatives, Mr. Paulson wanted to see what could be done to relieve the bottleneck.
Several rounds of discussions followed — in Washington, New York and on conference calls — led by two senior Treasury Department officials: Robert Steel, the under secretary for domestic finance and a former Goldman Sachs executive who is a close adviser Mr. Paulson; and Anthony Ryan, a former investment banker who is now assistant Treasury secretary for financial markets.
Besides hearing from senior executives from each of the big banks, the group also sought ideas from others. Several big international banks, including Barclays and HSBC, have been asked about their interest in participating. The group also reached out to several of the major structured investment funds, as well as big institutional investors in the commercial paper markets.
Edmund L. Andrews contributed reporting.
http://www.nytimes.com/2007/10/14/business/14bank.html?ex=1350014400&en=fe375eef310475e4&ei=....
Fed Ops: 31.50B Matures this week.
Mon: 7.50B 3day
Thu:
(1) 4.00B 14day
(2) 20.00B 7day
Float: 37.50B
===================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt: ~ New Limit: $9,815,000,000,000.00 T
=========================================================
Fed. Stuff
Mon: Bernanke at Economic Club dinner.
Wed: Beige Book & KC Fed pres Hoenig.
Fri: Bernanke & Poole.
**Thank you Ray
Fed Ops: 31.50B Matures this week.
Mon: 7.50B 3day
Thu:
(1) 4.00B 14day
(2) 20.00B 7day
Float: 37.50B
===================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt: ~ New Limit: $9,815,000,000,000.00 T
=========================================================
Fed. Stuff
Mon: Bernanke at Economic Club dinner.
Wed: Beige Book & KC Fed pres Hoenig.
Fri: Bernanke & Poole.
What Could Squeeze Shorts Next Week
By Jim Cramer
RealMoney.com Columnist
10/12/2007 2:36 PM EDT
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Next week could see some pretty violent short squeezes because beginning Monday, the SEC gets rid of the major exception to the rules it put through two years ago to stop naked short-selling.
I haven't read a word about this. But on Monday, if you are using one of several grandfathered exceptions that allowed you to stay naked short, including one that said basically if you were short it before you could stay that way and another that allowed you to hide behind options rules, you have to cover.
That means stocks that are or have been heavily shorted over and over, like a Taser (TASR - commentary - Cramer's Take - Rating) or an Overstock (OSTK - commentary - Cramer's Take - Rating) or some of these homebuilders, could see a big squeeze starting Monday.
I don't like to recommend ideas based on short-bashing. It is a sucker's game; lots of stocks are heavily shorted because they deserve to go down.
I think that you could see some wild moves and I wanted you to know why that could be the case and so you can game it accordingly.
TheStreet.com and James J. Cramer, its co
Good for U Doc...nice when plan
goes well.
thats my exit yesterday, no remorse here was going to close before the weekend & burning the premium.
Fed. 3day RP + 7.50B [net Drain -2.00B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 3day RP + 7.50B [net Drain -2.00B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Metalline Mining Announces Concession Purchase.
Friday October 12, 9:00 am ET
COEUR D'ALENE, Idaho, Oct. 12 /PRNewswire-FirstCall/ -- Metalline Mining Company (Amex: MMG - News) announces the purchase of the Volcan Dolores concession covering 10.4946 hectares, Exploitation Title No. 224873, expiring June 15, 2055. The Volcan Dolores concession is located within Metalline's large Sierra Mojada concession, on the western boundary of the Unificacion Mineros Nortenos concession and the southern boundary of the Esmeralda I concession.
http://biz.yahoo.com/prnews/071012/laf020.html?.v=101
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and gold wakes up ;))
EDIT MMG, never liked luden even much larger
they prolly buy mmg for the potencial.
EDIT #msg-23471289
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