Staying busy livin'
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We'll be watching for ya' VIP. Take care bro'.
I'm becoming more convinced every day now that the reason all these moves don't get any traction with the banks...ie they won't lend to each other even after ALL THIS STUFF THAT'S BEEN DONE...is that they DO KNOW the value of these "bad assets" on their balance sheets and the true leverage multiples that've been used. They KNOW that a wimpy $1 Trillion bailout won't even touch the problem.
And... the hedge funds know the true value and amount of the credit default swaps that are out there. That's why THEY KEEP SELLING as fast as they can no matter what level the market drops to.
I think we can kiss ALL THAT $700 BILLION adios, along with the next several trillion they'll surely throw at it.
Ironically...as of today the hedgies are now again able to short into the very drop they're now creating and they'll once again come out of this smelling like roses...with ALL THAT MONEY now in their greedy little mitts.
There's now a global concerted effort to stem this freefall in the markets after actions taken overnight worldwide.
Liesman said something interesting this morning..
if you're thinking this market is going much lower, you're now "leaning against every central bank and PRINTING PRESS on the planet".
I'm still hanging on to all the physical silver I've ever bought and looking for more.
Just thinking outloud here...(Read SEC Article at end of message)
It's interesting first of all that there are(for the first time in my memory)fewer new REGSHO list stocks than those coming off the list today, even though there's still almost 200 on the list.
I find it curious that they'd admit that there is significant enough naked short selling to issue a new rule, but then have it expire and allow more naked short selling? ???
Is it possible that the naked shorts(huge hedge funds) are afraid of being busted, prosecuted, going broke, whatever...and so are selling their long positions(tanking the market)in order to raise cash to cover their short positions before some legal deadline?
SEE ARTICLE BELOW
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934 RELEASE NO. 58711/ October 1, 2008
ORDER EXTENDING EMERGENCY ORDER PURSUANT TO SECTION 12(k)(2) OF THE SECURITIES EXCHANGE ACT OF 1934 TAKING TEMPORARY ACTION TO RESPOND TO MARKET DEVELOPMENTS
Pursuant to Section 12(k)(2) of the Securities Exchange Act of 1934 (“Exchange Act”),1 on September 17, 2008, the Securities and Exchange Commission (“Commission”) issued an Emergency Order (the “Order”) aimed at further reducing fails to deliver and addressing potentially abusive “naked” short selling in all equity securities.2 The Order became effective at 12:01 a.m. E.D.T. on September 18, 2008 and is currently set to terminate at 11:59 p.m. E.D.T. on October 1, 2008.
Pursuant to our authority under Section 12(k)(2)(C) of the Exchange Act, we are extending the Order. Section 12(k)(2)(C) authorizes the Commission to extend an emergency order issued pursuant to Section 12(k)(2)(A) of the Exchange Act for a total effective period of up to 30 calendar days, if the Commission finds that the emergency still exists and determines that an extension is necessary in the public interest and for the protection of investors to maintain fair and orderly securities markets.
We have carefully reevaluated the current state of the markets and we remain concerned about the potential of sudden and excessive fluctuations of securities prices generally and disruption in the functioning of the securities markets that could threaten fair and orderly markets. We intend the enhanced delivery requirements (temporary Rule
1 15 USC 78l(k)(2).
2 See Securities Exchange Act Release No. 58572 (Sept. 17, 2008) 1
204T and elimination of the options market maker exception) imposed by the Order and the “naked” short selling antifraud rule to provide powerful disincentives to those who might otherwise exacerbate artificial price movements through “naked” short selling. Thus, we have determined in this environment that the standards under Section 12(k)(2) for extending the Order have been met. Accordingly, we have determined that extending the Order is in the public interest and necessary to maintain fair and orderly securities markets and for the protection of investors.
In addition, we note that Staff of the Division of Trading and Markets has issued guidance regarding the Order to address current and anticipated technical and operational concerns resulting from the requirements of the Order.3 The guidance will continue to apply for the duration of the Order and the Commission hereby incorporates and adopts the guidance.
IT IS THEREFORE ORDERED that, pursuant to Section 12(k)(2)(C) of the Exchange Act, the Commission hereby incorporates and adopts the Division of Trading and Markets: Guidance Regarding the Commission’s Emergency Order Concerning Rules to Protect Investors Against “Naked” Short Selling Abuses and the Division of Trading and Markets Guidance Regarding Sale of Loaned but Recalled Securities.
3 See http://www.sec.gov/divisions/marketreg/204tfaq.htm and http://www.sec.gov/divisions/marketreg/loanedsecuritiesfaq.htm 2
3
IT IS FURTHER ORDERED that, pursuant to Section 12(k)(2)(C) of the Exchange Act, the Order is extended such that it will terminate at 11:59 p.m. E.D.T. on Friday, October 17, 2008.
By the Commission.
Florence E. Harmon Acting Secretary
http://www.sec.gov/news/press/2008/2008-235.htm
All I know is that the market lost about 90% of it's value in the Great Depression of the '30s, but I really don't think that can even happen in this day and age.
I do think it's VERY POSSIBLE that we could test the lows we saw after the Y2K plunge to around 7500 in the DOW if somebody doesn't get a handle on this pretty soon.
Hell, we could be there this week if this thing gains any more momentum to the downside. They don't even put on the brakes in the DOW now until it's down like 1200 points in one day.
We're not even two full days from 7500 if we go limit down a couple of times this week.
One thing that seems like a sure fire way to get stocks to go up is to print money and devalue the dollar. Don't know if they'll go there though since the dollar has already been cut in half since dimwit became our Dear Leader, although they do seem to be running short on other options. ??????
It would stem the tide of deflation we're now in. And silver/gold would be AWESOME!!!!
LOL
I'd like to revise and extend my prior remarks.
Let me just add....
HOLY CRAP! LOOK OUT BELOW!!!!!!!!!!!!!!
OMG...dimwit is on tv "explaining" to all of us what a "credit crunch" is and how it works.
He just said he'd be taking questions when he finishes. This is sure to make for some great John Stewart quote moments.
Hey dimwit, I have a couple of questions for ya...
You do know that there's NOTHING that can be kept secret from the next president right?
How bad do you hope the next prez is a republican so that all your dirty secrets remain in republican hands?
Why are you still here?
Why don't you just crawl back under that rock in Crawford?
I think Liesman and Santelli just put their finger on it.
They've likened this to a battle with a very wide front and that each step taken is just one of many that needs to be taken and that the fed is really just plugging holes in the front.
This last move does seem to have SLOWED the freefall but it's not enough yet to turn the tide of the battle.
Also this really isn't shaping up to be a V bottom. Probably a long rounded bottom is more what it'll look like when it's all said and done.
The advantage to that kind of bottom is that it should be a lot easier to recognize it when you see it.
I'm not going to chase any sharp moves to the upside as I think those will just be a long series of headfakes and money losers.
I may go back to my elipse charts to see if I can pick the smaller but tradeable highs and lows that'll be part of defining the "cup" that I believe will be the pattern for this market, and I think yesterday's 800 pt move to the downside is one of the first data points to use to start drawing this cup bottom.
The first thing I'll be looking for is a curving of the downtrend toward a more horizontal direction and the eventual upcurve.
There'll probably be MANY tradeable moves during this period but BUY-AND-HOLD will imo be a big waste of time for a long time to come.
I like this type of movement a lot better actually. There's no intense pressure to jump for fear of missing the bottom.
The market likes the move to back up commercial paper. All the components have suddenly started moving in the right direction including the Euro and silver.
Talking heads are celebrating that "the fed is finally BAILING OUT MAIN STREET TOO" instead of just wallstreet.
It's sure starting to feel like we're at or near at least a short term bottom now. Still haven't seen a classic capitulation bottom pattern yet though. I have my doubts yet about this new found optimism in the market. One more down move...a big down move on extreme volume would be more convincing. And on the other hand, nothing is acting quite "normal" these days.
I do think it's inevitable that they'll finally stumble on the right move/combination/tactic. Have they found it with this? Hmmmm????
Cramer was talking about DOW 8300 a couple of days ago, but I wonder if even that isn't a bit optimistic. Today he even said that (paraphrased)everyone should sell all their stocks now. Sounds like he's lowering his estimates too.
I'm still thinking that the housing crisis is the key, and so far I've heard that "it'll take 2 weeks for the fed to get organized enough to start buying up the toxic mortgages". Then I heard it would be a month, and today I heard it would be 2 months before they can even get their act together enough to BEGIN to deal with the problem.
Next I expect to hear "it'll be sometime in mid 2009..."
Things can go a lot lower in 2 months.
And I wouldn't be fooled by todays big dip and rebound. The volume wasn't anywhere near a "capitulation" selloff.
I expect we'll dance around 9-10 thousand on the Dow for a day or two, but 10k seems like it's going to be a psychological ceiling for the foreseeable future.
Market's down 611...hmmmmm, I wonder if another $700 billion would make em feel "confident"?
I'm pretty sure I heard a little while ago that the fed just made another $900 billion available to banks for lending today if I'm not mistaken. Didn't seem to even make a dent in the confidence game yet.
Billion, Trillion...maybe a Quadrillion would make everybody happy. Don't think even the Fed has enough printing presses or paper and ink for that matter to create that much new money.
Naaa...I doubt we'll see DOW 10,000 again for AT LEAST 10 YEARS.
But of course in this ILLUSIONARY UNIVERSE that the Bushies have created, no matter that this didn't work we'll never hear the end of "how much worse IT WOULD HAVE BEEN if they hadn't done it."
Hey Josh...this Lehman Bros con artist CEO Richard Fuld has a $14 million dollar beach estate down there in your neck of the woods on Jupiter Island.
Just thought I'd pass that along in case you wanted to go "visit" him. LOL
BTW...I heard Florida's construction market is one of the hardest hit in the entire country. You still hanging in there and staying busy?
Are we havin' fun yet?
Looks like the fear isn't all gone yet. Go figure! LOL
People afraid some new revelations of more bank failures etc might happen over the weekend and so held on to some silver.
And it sure didn't take long for reality to set in on the general market. The Dow sold off even more than I thought it would.
TGIF...I'm exhausted and plan on a VERY RELAXING weekend. Hope you all have one too.
CIAO FIENDIES
So...now we watch to see what price they pay for the toxic assets. They say they'll pay somewhere in between "real value" and "mark to market".
How they figure "real value" is the voodoo in this doodoo. Hang on to your wallet!
I guess we also have to stay on watch for "liquidity infusions" too.
Even before the vote, California/Schwartzenegger said they need $7 billion or they'll have to start closing publically funded operations...ie schools and god knows what else.
Paper silver isn't exactly "tanking", at least not yet. It'll be interesting to see what direction the price of paper AND physical silver goes for in the secondary markets in the next few days.
Anybody find it as hysterical as I do that the repubs wouldn't pass the first bill "on principles", because they think it's uncapitalistic to bail out free markets...but add another 100+ billion in pork spending and they're all for it.
Fiscal conservatives? Principles?
ROTFLMAO
One last thought on this vote vs tank/soar
If the bill does go to the floor/passes, the Dow will soar...for about 5 minutes and silver/gold will tank and stay down. Then reality will sink in and the Dow will fall back again and may even end in negative territory along side silver/gold.
If the bill doesn't go to the floor/fails, the Dow will have another tantrum and tank BIG-TIME while silver/gold will soar, then drop back SOME but then stabilize at a higher level.
I figured out a way to stay online while the carpet is being put in. YAY! LOL
I think I may have figured out what's going on right here...
Traders are covering both sides of this trade, buying both silver/gold and stocks.
I now suspect that, again depending on the outcome of whether the bill goes to the floor or not,(and it will only GET TO THE FLOOR if the votes are actually there)
that one will soar and the other will tank. Be ready!
Gold and silver are up pretty good right here. That would appear to mean to me that there's a lot of skepticism as to whether this bill will get to the floor or pass if it does. On the other hand the general market is also up which would seem to point to some confidence that the bill will pass. It's crazy out there I tell ya!
Personally I give it a little less than a 50-50 chance of passing.
I'll be going offline here in a few minutes. We're having a new carpet installed in the office and I have to disconnect the electronics.
Hope I have it back online by the time the vote either happens or doesn't happen.
What timing! //sigh
The Dow is a NUTBAG in my opinion right now. The employment numbers came out and they're TERRIBLE reaching new highs. The economy is going in the toilet no matter what happens with this bill.
And by the way...It's still up in the air whether this will even come to the floor at all. The repubs WILL NOT SAY that they have the votes yet. A lot of arm twising is currently underway but when asked they would not yet commit to a sufficient number of votes.
If the bill does pass we still have to wait to see at what price the assets are sold to the fed. If they pay too much they'll need to come back and ask for more taxpayer money...which IMO AGAIN, will not be given. NO way now how!
And that will mean that printing money is the only tool left to them...INFLATIONARY.
If they get a reaonable deal on the assets...we'll have to wait and see how the reverse auction goes and then watch from there what happens in the credit market.
Two days ago when that article was written I'd have agreed with it 100%, but since then things have changed and so has my opinion which you already know.
IMO, the easiest way to play this right at the moment is...if the bill doesn't pass/get to the floor I'll buy all the gold and silver I can get my hands on for the next 24 hours.
But if the bill does pass, I wouldn't touch it because the way it stands now it'll be DEFLATIONARY for PAPER silver/gold but may or may not be deflationary for physical.
As for physical gold/silver...especially silver...any I owned I'd hold for now and add if a bargain to the current price happens to present itself.
And if the bill DOESN'T PASS...I think physical AND paper silver/gold will rise.
So...
bill passes------bad for gold/silver
bill doesn't pass------good for silver
JMHO of course
continued from my last...
..."So don't expect to get as much info on the Euro situation because I think it'll be quashed as much as possible by the powers that exist here. And even if it does work over there, it may be too late for us here by the time we find out."
but...even if we do find out too late and we end up doing it differently here, (dumping this mess/burden on the US taxpayer), the flight TO THE USD could still reverse back toward the Euro causing the dollar to crash again relative to the Euro and once again putting the US into an inflationary scenario.
...unless we, the taxpayers, have also bailed out the European banks in which case I have NO IDEA WHAT WILL HAPPEN! LOL
ok...I think I'm done now. Sorry for the rants but I have to write this stuff down to get it into my own head sometimes.
From where I stand now, this whole Euro falling thing is a bit of a weak case.
The unexpected rush back into US dollars is said to be predicated on the fact that Europe doesn't have a central bank/fed that can act for of the countries over there like our fed can do here.
And so the case is being made that they're having to bail out banks on a country by country and bank by bank basis. But.....!!!
In a sense, this seems to me to be at least roughly the same scenario as was tried here with Freddie/Fannie/and AIG which is infinitely better for the taxpayers over the bill they're trying to pass here now.
And it's almost like an alternative, and imo a superior experiment is being continued over there in the AIG model.
Now, if it turns out as I suspect it might, that that model does work better than ours that the flight from the Euro and to the Dollar could reverse very quickly...and if VERY successful, could reverse the DEFLATIONARY trend just as quickly.
So...imo, we need to keep as close an eye on the European situation as the US situation and their respective progress and consequences.
Now the banks here and Wall Street would MUCH PREFER the way it's attempting to get done here because they will be bailed out, enabled to continue in their evil ways, and the taxpayers will shoulder this trillion dollar+ mess.
So don't expect to get as much info on the Euro situation because I think it'll be quashed as much as possible by the powers that exist here. And even if it does work over there, it may be too late for us here by the time we find out.
LOL...sorry about that.
I really didn't intend to get you involved in political discussions. I just went to the last one of your posts to talk about the silver/usd/euro/oil/inflation-deflation situation.
And, getting back to that...I'm convinced now that with the continuation of falling housing prices, falling oil demand/prices due to the coming mega global slowdown, and the Euro falling relative to the dollar that DEFLATION, not INFLATION is going to be the main worry at least for the short term.
Now if SOMEHOW, this bill doesn't pass and a new solution based on the AIG bailout model comes to the fore, where we take a stake in the company and don't get suckered into only buying the toxic assets of all these failures...I think the people, the global economy and therefore commodity prices will find a return to strength much sooner and suffer much less overall.
I'm glad to hear you respect Starboy too although maybe you didn't know that he's a boogie-woogie blues piano playing California coasty either. Hopefully that won't change your view of him.
And I happen to consider myself a proud somewhat left of center liberal Democrat. But I've been known to ride a horse and wear a 10gallon hat on rare occasions too. I hope that's not too confusing.
Did you know that some cowboys in Oregon actually surf, and that some surfers can actually ride horses? We're quite a talented group up here...on both sides of the Cascades. Who knows...it might have been a couple of hat-wearing, horse-riding liberals that saved you. Did you ask? Or just assume what they were based on their attire and mode of transport?
Do you suppose they assumed you were a Republican before they saved you? Good thing for you they didn't ask I guess.
I don't bang my head against brick walls anymore.
I do wish somebody had told me that this was the Right Wing Money Making Board though. I'd have looked up my friend Starboy somewhere else.
Yeah, I don't know where you're from, but here we save people before asking them who they're going to vote for.
If you'd been drowning in the ocean surf you'd probably have been saved by one of us lefty communist surfers.
Maybe you'd prefer to drown?
It pains me to hear that you think that in Oregon only right wing cowboys would save somebody in need.
Yeah, sorry about that. But I made the same mistake too although I've now corrected that.
Mort Zuckerman just made one of the major points that I've been making about this bailout. Namely that We the People are going to get raped in this deal.
Houses are already sitting out there empty and rotting and being stripped of their fixtures and even copper wire as we speak. This is in no way reflected yet in the "value" of these mortgage defaults we'll be taking on, not to mention that housing prices will continue down probably another 20% before this is over...if we're LUCKY.
When this becomes apparent in a few months and concensus is that this wasn't enough and didn't really work as it was supposed to, the printing presses will have to be revved up again...that might be the time buy back in to precious metals, but with the Euro failing making the USD look good by default this situation becomes orders of magnitude more complex than any other situations we've ever faced before.
We're headed for harder times across the globe even if this bill does pass and "works" freeing up the credit markets...which by the way seems to me to only be enabling another round of the same idiotic behavior.
Notice too that oil is down and the dollar is up against the Euro...not because the dollar is strong but because the Euro is weakening/failing now.
I think for the near future that the price of oil will be a good indicator for gold/silver prices, and as it falls in the face of quickly diminishing demand that silver/gold will follow suit...until the bailout doesn't work and they finally resort to printing money again as the final solution.
JMHO of course.
I'm pretty convinced now that the deflationary effects of a massive global slowdown is going to outweigh any INflationary effects of "possible" money printing coming down the pike.
The fed is determined to take the alternative route of "borrowing money" from US with the promise of a payback with a potential profit rather than just printing up a bunch of new bills to "liquidity" our way out of this.
I personally don't think this bailout/rescue/brainscrew is going to work, and printing massive amounts of new money will have to come later, but for the mean time that's not the case.
So, silver/gold is not going to hold up as it would in a normal situation where inflation would rule the day.
LOL...Yup, that's how it works!
You're now a full-fledged member of the club VIP. Only thing left to do is sew the big target emblem on your leathers and have it tatooed on your forehead.
That's to make it easier for "them" to see you coming. LOL
Did you see this article? Check it out.
TED BUTLER COMMENTARY
September 29, 2008
Meet The New Boss,
Same As The Old Boss?
(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)
It’s hard to imagine now, but there were times when I worried about having anything fresh to write about silver. Lately it has been choosing from many different topics. This week, the choice was easy. Amid the continuing swirl of major financial crises, one issue rose to the top.
On Thursday, September 25, the Wall Street Journal carried an article announcing that the Commodity Futures Trading Commission (CFTC) had opened a new investigation into allegations of manipulation in the silver market. http://online.wsj.com/article/SB122231175151874367.html
Furthermore, on that same day, Commissioner Bart Chilton e-mailed a copy of the Journal story, along with his own comments confirming the investigation, to those who wrote to him about the issue. Both the article and Chilton’s e-mail made special note that the silver investigation was being conducted by the Division of Enforcement, and not the Division of Market Oversight, which had previously investigated the silver market. In simple terms, Enforcement is the muscle.
Whether an entire market, like silver (or gold), is manipulated or not is a matter of utmost importance. In fact, nothing could possibly be more important. Market manipulation is a violation of law and a serious crime. Market manipulation damages everyone in the long run.
Because market manipulation is the number one priority of the CFTC, any revelation that they might be investigating a manipulation in any commodity is big news. So big, in fact, that such investigations are almost always kept strictly confidential while the facts are determined. This is usually so as not to disturb the market. That the CFTC has chosen to openly reveal this silver investigation is almost unprecedented.
Moreover, what makes this silver investigation a rare event is that the allegations are of a manipulation in progress. To my knowledge, all past investigations were revealed after the manipulation itself was concluded. Not only is it rare for the CFTC (or any government agency) to reveal a serious active investigation, it is unheard of to reveal an investigation of a potential crime in progress. If a regulator suspects a crime in progress you would assume the regulator would first end the suspected crime and then finish the investigation. If the regulator didn’t think there was a sufficient evidence of an ongoing crime, then why reveal that an investigation has been opened?
I think this is why there is universal expectation (including by me) that the silver investigation will be a whitewash. I know that silver is manipulated, and I’m glad to see the CFTC investigate. But I can’t help but feel suspicious of their objectivity, because they have adamantly denied such a manipulation for more than 20 years. How can they conduct a fair investigation and not be influenced by their past findings? I have been here and done this many times, and I don’t feel like getting fooled again.
EXPLANATION, NOT INVESTIGATION
Why the CFTC is investigating a silver manipulation is somewhat of a mystery to me. I certainly didn’t ask for an investigation. I did ask you to ask for them to explain the data in their August Bank Participation Report, in my "Smoking Gun" article http://www.investmentrarities.com/08-22-08.html This is the report that is directly responsible for the investigation. This is the report at the heart of the matter. But there is a difference between explanation and investigation.
When I first uncovered the data in this report, a little more than a month ago, I couldn’t believe my eyes. I had studied the data in previous Bank Participation Reports for years, but that’s because I’m a silver data junkie. This is usually a nothing report. In all the years I studied this data, it seemed like a waste of time. It was an obscure report that I never heard anyone ever refer to before. But the data in the August report was so disturbing that, in order to make sure I wasn’t imagining things, I asked two trusted associates, Izzy Friedman and Carl Loeb, to review the data with no advance suggestion from me as to its meaning. I wanted their unvarnished opinion.
When they confirmed that this was the clearest case of manipulation possible, I faced a new dilemma. I was inclined to believe that the data was in error. I suspected the CFTC would retract the data. So I was worried about being publicly embarrassed for making a big deal out of what may have been a clerical error. But the more I matched this data against the weekly Commitment of Traders Report (COT) data, I could see the data was accurate. Certainly, if the data was incorrect, the CFTC would have said so by now.
The data is clear - one or two U.S. banks sold short the equivalent of 140 million ounces of silver in one month. That’s more than 20% of world annual mine production. Less than three U.S, banks sold more than 10% of world annual mine production of gold simultaneously. The price of silver and gold then collapsed by an historic amount. These same banks have used the sell-off as an opportunity to buy back as many of their short positions at a giant profit. Those are the facts.
It is important to put these numbers into perspective, in order to appreciate their significance. One way to do that is by comparing what just took place in silver to other commodities. If one or two U.S. banks sold short, in a period of one month, the equivalent of 20% of world annual production of corn, that would equal one million futures contracts. (25 billion bushels x 20% divided by 5000 bushels). Since the entire open interest in corn futures is one million contracts, a sudden short sale of that amount would crush the price.
If one or two U.S. banks sold short 20% of the world annual production of crude oil, that would be the equivalent of 30 million NYMEX futures contracts. (30 billion barrels x 20% divided by 1000 barrels). Since the entire open interest on the NYMEX is around 1 million contracts, a sudden sale of 30 times that amount would drive the price of oil to ten cents a barrel. It would also be market manipulation beyond question.
The CFTC doesn’t need to investigate. They only need to explain why their own data fails to prove manipulation in silver and gold. Save the taxpayer some money and all of us some time. This needn’t take days, weeks, or months. This should take, literally, minutes. Why maintain and publish the data in the Bank Participation Reports if the CFTC won’t recognize an obvious manipulation that is a crime in progress.
THE COTS
The latest COTs confirmed the one thing I was hoping and expecting them to confirm, namely, that the biggest shorts continued to cover their short positions in gold and silver. What makes their short covering most noteworthy is that the buybacks in the most recent report occurred on a sharp rise in price, some $3 in silver and $120 in gold for the reporting week. This tells me that the big short, the U.S. bank(s), is serious about getting out of as much of its massive silver short position as it can.
From the time of the August Bank Participation Report, the big shorts have now covered nearly all of the gold short position put on during July. Therefore, the manipulation in gold was a complete success. In silver, while the manipulation must be considered a success, because the big short has covered an impressive amount, it has not covered all of its manipulative short position. In looking at the structure of the COTs, it does not appear to me that much further liquidation can occur to the downside. To say that the COTs are structured bullishly, would be a gross understatement.
IMAGINE
My mentor, Izzy Friedman, recently asked me to turn the clock back to a year ago, and then try to imagine that we would have a severe retail silver shortage. A shortage that now seems to be spreading to gold. It’s a powerful and profound thought process.
This silver retail shortage is completely underappreciated. I don’t think there could be more clear proof that silver has been manipulated in price. The talk that it’s "only" a retail shortage and not a wholesale shortage is silly. The silver retail shortage is so widespread in scope, it’s only a matter of time before it spreads to the wholesale sector. That’s especially true considering the record inflows into the silver ETFs. When the wholesale silver shortage hits, it will make a mockery of any CFTC investigation into manipulation.
The reason I believe the retail shortage is not truly appreciated is because of the boiling frog syndrome. Put a frog into a pot of cold water and increase the heat gradually to a boil and he won’t jump out. Because the silver retail shortage has been so persistent and gradual for the past year, we have grown accustomed to it. Most dealers have little to sell. Nowadays, it’s news when a dealer gets in a supply of silver, which is invariably sold out quickly. Guess what? That’s not normal, and just because it has been a gradual development doesn’t make it normal.
In fact, the growing and persistent physical silver shortage promises to be with us for a long time. Look around at the financial world. Do you see anything better to hold than real silver? Can you imagine owners of real silver rushing to dump their metal at depressed prices. To do what with the proceeds? Rush to put them in a failing bank?
It pains me to see so much financial peril around. Regular readers know I prefer supply/demand considerations and analysis of market structure. I’ve always considered the flight to quality aspect of silver as a bonus. But I see signs of that flight to quality in the current physical shortage. I don’t think that is going away any time soon. How many reasons does one need to load the boat with silver?
http://www.investmentrarities.com/tb-archives.html
Yeah, Good job John McCain.
So glad he parachuted in to bring the repubs in on the deal.
I guess they don't believe his crap either. They probably should have told him that before he went off blabbing about what a financial hero he was.
Maybe he can teleport himself back and save the day...again. LOL
He better hurry though. They're gonna' close the vote pretty soon.
Oooops...too late Johnny. Now what ya gonna do? Oh yeah, claim it was all the Dems fault of course.
See ya at the bottom Roy Blunt, John Boehner, John McCain...great leadership. Pffft
Misc article I wanted to save for future reading...
http://www.greencarcongress.com/2008/09/carbon-sciences.html
WOW...Nasdaq heading for a 1 handle! Incredible.
Yeah, things aren't making much sense lately. One day everything is connected to everything else and the next day everything is trading independently as if nothing else matters.
That's why I'm watching everything SO CLOSELY and trying my damndest to stay on top of all of it.
Next on the agenda is a possible house vote on the bill around noon eastern time.
If it doesn't pass there or in the senate, it's back to the drawing board for more revisions and of course the market's reaction to either passage or more wrangling and political posturing over possible revisions, and even TOTALLY DIFFERENT ALTERNATIVE PLANS!
Wow...Steve Liesman just said that he thinks the treasury/fed strategy is to "inject SO MUCH LIQUIDITY into the market that the banks WILL BE FORCED to lend it out". LOL
If that isn't a dilutive strategy then the world is flat and 6000 years old.
An interesting tidbit here too...the USD is rallying (on the dilution?...LOL),
but gold is bucking the commodity downward spiral and silver is back over $13 already.
Now what does that tell ya'?
Looking at the silver chart the other day, I was thinking I'd be a buyer in the $12.50- $12.75 range. Looks like that was a good call at the moment.
A couple other things...with neither the stock market nor realestate available as viable investments, where else can anyone go other than cash, treasury bonds (neither of which currently offer anything other than retaining capital value),
and...
precious metals which, at least while the flight to safety is the play of the day, hold GREAT POTENTIAL for upside if the momentum gets going, which I can't imagine not happening after everyone finally gets it in their head that no matter if we have a bill or not...the economy is going into the shithouse for at least a while.
I expect a quick relief rally on the news that the bill has passed, and then BAM! Market continues down, people finally GET IT, and silver/gold take off like a hot rocket.
I just can't imagine how silver could get hurt much over the near and medium term when you consider this....
even if the congress passes this bill which is very likely and almost 100% probability, the economy is going to suffer. This fact alone will require serious "stimulus" actions and liquidity injections to shore it up.
We all know what stimulus and liquidity injections means now...printing or borrowing more money which is dilutive to the dollar which is inflationary which is good for silver.
There's enough fear in this market that a flight to silver/gold will endure for quite a long time just as part of a balanced and prudent portfolio if nothing else.
Now assuming the bill is passed, we first don't know if it'll work, if it's enough to do the trick, etc. But what we do know is that it will be dilutive at least to some extent and at least in the near to medium term before any of these so called "assets" that the govt is buying recover enough to actually dispose of for break even or a profit.
Now whether physical silver and paper silver act the same in this market is a question in my mind. Will the manipulation continue in the SLV etf and the COMEX?
And will this manipulation drag physical silver prices along with them?
Or will they trade independently and differently from each other?
Or will they both trade honestly in response to the current market forces for the first time in recent memory?
I managed to snag another 7oz of rounds and 10 1964 Kennedy Proof Sets (that include a silver quarter and dime too along with a nickel and a penny) tonight for good prices, but it's getting harder every day to ferret out the deals over on Ebay.
I got the 10 sets for a few pennies over $10 a piece and I can sell just the Kennedys alone for $12 to $20+. The quarters and dimes are gravy and sell for around 12X face value. I usually throw in the proof nickels and pennies as a teaser/bonus although even they go for a few bucks if you want to go to the trouble.
five 1964 proof sets 90% silver 1st YEAR KENNEDY (#2) (230294448271)
1 $51.99 -- Sep-28 Leave Feedback
five 1964 proof sets 90% silver 1st YEAR KENNEDY (#3) (230294448770)
1 $51.99 -- Sep-28 Leave Feedback
I just checked the Hong Kong silver market and silver has only dropped a few cents and looks like it's holding and possibly recovering.
Have you seen this? Hang tough. I think something big could be about to happen.
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Gold and silver dealer reports an ‘unprecedented’ shortage of metals
Sunday, September 28, 2008 By David Clerkin, Markets Correspondent
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”
According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.
However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.
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