Some Gold Thoughts

12/29/11
I have been asked a number of times recently where gold is going to trade over the course of 2012. I am not a seer, obviously. But I can make a few observations and guesses based on some emerging micro and macro trends.

I’m in the camp that feels that gold will get to $2,000 an ounce in 2012. ,,,, read more at
http://www.certifiedassets.com/inv/news/some-gold-thoughts/

A Flick of the Financial Switch; Jeers for Sears; $GLD is a Mining Share Dampener; Coin Dealer TV Advice

12/27/11
We’re in the no man’s land between Christmas and the New Year. The usual survey of news flow comes up light, but this is still the same dangerous world in general and from a financial sense. Somewhat odd that the seemingly unstoppable lava flow of financial bad news from Europe, with the U.S. and Japan waiting in the wings, takes a break for a week? Who knew that on going chaos and catastrophe could simply sign off for the holidays? So maybe, since the world is supposed to end in less than a year....

Please read more... http://www.certifiedassets.com/inv/news/a-flick-of-the-financial-switch-jeers-for-sears-gld-is-a-mining-share-dampener-coin-dealer-tv-advice/

Temporary Bear De-Clawing; Economic Jumble…. Merry Christmas!

12/23 Market Comment
Stock futures show an upward tilt once again as seasonal factors favor the bulls. The more than 600 billion-euro 3 year bank loan program, for now, has de-clawed the bears. But Sorry... read on here... http://www.certifiedassets.com/inv/news/temporary-bear-de-clawing-economic-jumble-merry-christmas/

$$ Understanding Why Our Budgetary Process is So Broken

.... and the mere token solutions in terms of cuts that our politicians are only capable of. Ask yourself, can this go on forever??

Of course it can't. I am not in the doom and gloom prediction business of when the end will come, but you and I both know in our heart of hearts that the debt trap this country is in, is eventually going to blow. This will be the Mt Tambora explosion on mankind in terms of the financial destruction that will ravage pretty much everyone. This can't go on forever. The delusionists will say, says who? I say it's all in the math as plain as day. We are finite, so is our ability to 'print' our way out.

A reader sent this to me....

• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $ 1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cuts: $ 38,500,000,000

"Let's now remove seven zeros and pretend it's a household budget…

• Annual family income: $210,700
• Money the family spent: $380,200
• New debt on the credit card: $160,500
• Outstanding balance on the credit card: $1,427,100
• Total budget cuts: $3,850" – Anonymous

$$ OT: Cultural Commentary about the Holidays

and a word to my son's elementary school in southeastern, NY and all schools like it (which is most schools in NYS). Thanks for completely denuding yourselves of the holidays. Yes, the pusillanimous Christmas/holiday haters have won hands down. At my 2nd grade son's school, I did not see one holiday symbol, not Santa, not even a Menorah, not even something about Kwanza -- nothing. Not that I was expecting a Nativity scene with a baby Jesus and the story explained, but it is as if the Grinch came in and vacuumed away the holidays and left just a grey and dull school entrance.

Back in the early 70's I remember the little Christmas tree in the cafeteria and how one of the students accidentally knocked it over and quietly walked off amid the confusion (lol). I remember my second grade teacher Mrs. Resnick playing us Hannukkah music and teaching us about the tradition's she celebrated. And you know what? I survived! We all survived! So i ignore the arguments that school is not the place for holiday traditions. Not so long ago it was and we were all the better for it. It was part of learning about our CULTURE and its roots. School has become a place run by heartless and pc administrators. To those in contral and allow this to happen, you all &**&! Merry Christmas!

$$ Market Cheer/Denial; Super Low Mortgage Rates; Gold Fever in Greece? A Dear Jamie Letter

As noted yesterday, seasonal factors tilt the odds in favor firmer prices, for now. Yesterday, the Dow clawed its way from the minus signs to etch out a 3 point gain. The techs were hammered on Oracle's tepid numbers. This morning stock futures are firm. Nothing has blown up in Europe over the last 15 hours. The markets are still digesting news of the over 600 bln in three year loans that will go to euro banks to stabilize them. Of course, these,,, please read more here: http://www.certifiedassets.com/inv/news/market-cheerdenial-super-low-mortgage-rates-gold-fever-in-greece-a-dear-jamie-letter/

The NAR and its "Revisions" $$

How many here bought a house between 2007 and 2010 based partially on whatever positive spin your real estate agent may have used from the National Association of Realtors data? You participated in being fooled, at being an easy mark. You may have been told how there was activity, act now, etc. There was far less activity than previously claimed.

The NAR has released revised home sales figures. The National Association of Realtors revised existing home sales from 2007 to 2010 down by 14%. 2010 revised downwardly by 15%. This is confirmation of what everyone without rose colored glasses observed for themselves. Residential RE was undergoing a complete and utter pole axing during those years. The NAR calls these huge changes, “benchmark revisions”. Right. There was once a time when revisions meant perhaps a 2 or 3% adjustment. This isn’t a revision. This is a complete re-do of previous false data.

A side diatribe
Face it, realtors for the most part are simply salespeople on steroids (because of the value of the transactions). Yes, they have to pass courses and get a license, but this merely elevates the skills of any old car salesman to that of being a so called "professional" (in many cases, this is true of your stock broker). Now, I say 'for the most part', because my wife happens to be a realtor. She tells it like it is to potential customers. That means she looses out on a lot of potential sale opportunities. She doesn't want to play the game of going along with the home seller and listing a property at an excessive price that will only sit, which is still a problem, at least here in the lower Hudson valley. There are some good realtors (more shilling for my wife, but she deserves a good word, after all she donated a kidney to me and saved my life!), but they are in the minority. Most will do anything to get a listing and will say anything to get someone to buy. Watch out for them... the 3 to 6% commission makes it too tempting for most of them to be really above board. They are seduced by going to the closing table and getting that big commission check.
Rant Over

I would love to hear how the cadre of realtors are explaining this stuff away. lol.

Bottom Line: There is nothing good from these revisions. Deeper and as yet to be reported repercussions are likely in the new homes market. It is not out of the realm of possibility that starts of new construction may have had a basis in some form of over optimism about existing homes data. Oh, the possibilities.  Time will tell.

12/21/11 Jump, or Dump day on Hump day?

Morning Market Comment

After a 300 point Dow surge yesterday, stock futures are unchanged to a bit lower. No surprise there. Will the bulls be able to pull off more follow through. My guess is that thinner volume could make it easier to juice things up as we move toward the end of the year. Please read more at... http://www.certifiedassets.com/inv/news/122111-jump-or-dump-day-on-hump-day/

Futures Traders, the Joke is On You!

Remember from a year ago? $CME head Duffy said that the CME is the guarantor of trades on its exchanges. Go ask a customer of $MF Glocal how that worked out. LOL, but really not a lol. Some serious, outright theft has happened related to MF and I can't and won't let this go until the money of thousands of customers is returned in some form.

This is about more than just the losses that an individual customer can suffer speculating in these markets. This is about the realization from the commodities reform of 2000 that Derivatives traders like JP Morgan have SENIOR status over everyone (buried, of course, in the fine print). Individual customers be damned, the derivatives players MUST remain whole.

When Johnny "the Don" Corzine was loosing big money, $JPM. as the lender to MF, had advanced warning that the MF house of cards was a about to fall, and with just a few key strokes hundreds of thousands of segregated MF accounts were frozen and then emptied -- cyber space can be handy with this sort of thing. As trends forecaster and burned Lind Waldock account holder, Gerald Celente has stated, "the gang is in control".

Read more here: Bloomberg: JPMorgan Actions as MF Global Lender Likely to Be Probed
Related: Barron's: The Silver Rush at MF Global


You can hear the lie below from the CME group head at 2 minutes and 22 seconds into the video.

Turnaround Tuesday? Housing, Europe, The Banks

A hodge podge of various events are stewing together to bring some ‘hope’ back to the market. Futures are bid higher and are indicative only of what is going to happen at the open – not for what will happen for the entire day. Bringing hope, a surprise rise in German business confidence, a drop...

http://www.certifiedassets.com/inv/news/turnaround-tuesday-housing-europe-the-banks/

12/19 Morning Market Comments: Six Things Already Bugging Me This Week

This is the week leading into Christmas and it's supposed to be quiet. That's the usual pre Christmas routine. But this may not be a routine week. Some key items come to mind:
1. S&P has warned that it could downgrade a number of Euro-zone countries in the week ahead. This could add extra volatility to what would normally be a wind down week into Christmas and then the new year.... Please read on here: http://www.certifiedassets.com/inv/news/6-things-are-already-bugging-me-this-week/?preview=true

Thanks Founding Father's, But Your Dream is Just About Dead

I am going to wait and not make my endorsement in the Republican race known until the New Year. Certainly, Neither Mitt, nor Gnewt are getting my support -- that is unless I decide doing the same old thing and hoping for the best is the right way to go. And, of course, that is completely the wrong way to go. We might as well re elect Obama to hasten the collapse of the country.

$$ A Quote

This statement from Alan Greenspan was made more than 20 years before he became chairman of the Fed.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

--Alan Greenspan, Gold & Economic Freedom (1966)

Non Event Inflation News is Actually Big Wake Up Call News

On Friday the government reported November Consumer Price Index (CPI) data that showed NO change in prices last month with a core CPI (factoring out useless things like food and energy due to their volatility) up a teeny weeny .2%. 

In other words, the government wants you to believe that the anecdotal price increases that you have observed (eg. everything getting seemingly more expensive from food to having your lawn mowed) is a just a figment of your imagination.

On an annual basis the government reports a peachy keen gain of only 3.2% in the overall CPI.  By this estimation alone, the government is implying that it would take over 20 years for the CPI to double, which of course is laughable - really - belly laughable, or so laughable that it would hurt.

The famed Shadow stats site, with its honest data vs the pablum the government regurgitates,  estimates that CPI is really running at around 7%.


But let's take Uncle Sam at his word. CPI thus far this year is up a tame 3.2%.

At the surface, this seems like good news. But it is actually a bad news scenario when the universe of money rates is considered. Here's a screen grab from CNBC of US rates. As seen here, the entire curve from 3 month bills to 30 year bonds is BELOW the seemingly tame 3.2% government inflation stat (Click to see larger and clearer image).

If the Shadow Stat CPI inflation figure of 7% is taken into account, negative rates are then running close to an almost unimaginable 10%. http://www.shadowstats.com/alternate_data/inflation-charts

One could argue that with the core PCE price index, as of November, running at 1.7%, the negative yield umph is taken out of the benchmark 10 year, to which I say, 'whatevahhh'. Regardless of which inflaton number one uses, there is still a substantial chunk of the rate universe running in negative territory. I strive to shun the arcane and pseudo sophisticated economists' talk and stick to reality. So pick any inflation gauge. It doesn't really matter. That is to say that no one is getting rich from treasury yields in their present state when inflation is factored in. They are getting poorer.

Negative yields mean a loss of dollar purchasing power which makes us all the poorer. It begs the question, which is worse hyper inflation, or a loss of purchasing power? They are both bad and the loss of purchasing power is actually worse since it is an insidious and more abstract concept for the masses to follow. The November CPI figure is big reminder of the collapsing debt bubble we are in the midst of! This is money at its worst. IF you don't realize this, let me shout it out. This is ongoing FINANCIAL REPRESSION.

Put another way, the negative rate problem means millions of grannies and conservative investors, who have their dollar wealth tied up in CDs and other money market type instruments are losing wealth with each passing day as inflation (even at a modest 3.2%) quietly over time eats away at their wealth which is not only not producing income, but is contracting wealth due to a negative rate of return when inflation is factored in.

If knuckle sandwiching seniors and other conservative investors with negative rates isn't bad enough , consider this on the scale of central banks and governments which hold the lion's share of treasuries both in their own government's debt and their holdings of US debt.

Negative real interest rates plague not only the US, but all of the other biggies including China, Germany, Japan, Canada, etc.

Wow, it's no wonder that central banks have been busy buying gold in 2011. Take my word since I have already looked at all of this stuff, or investigate for yourself here: http://www.gold.org/investment/statistics/investment_statistics/

Quick conclusion. The CPI release may have been a yawner on Friday, but it was still yet another jarring reminder of the predicament that fiat money is in: up a stinky creek with no paddle.

And a word to the wise deflationists. Yes, the negative rates are a deflatonary sign, but again, loss of dollar buying power is as bad if not worse than faster and hyperinflation.

Hope You Can’t On; Everything is OK; Gold Bounce; Ongoing RIM Wreck; $ZNGA

One of the more intriguing wire service reports that crossed during the session yesterday (and largely missed, or ignored by the markets) were a few comments by the IMF.... Read more here:  http://www.certifiedassets.com/inv/news/hope-you-cant-on-everyting-is-ok-gold-bounce-ongoing-rim-wreck/

The Gold Bull Market Takes a Breather; Spain Auction Makes it Thru; A $100 mln Penny

12/15/11 Market Comment

First a statment, or three about gold:
The bull market in gold remains intact. Looking at the decade long bull market in gold on a monthly basis, the 18 month moving average is at $1489/oz, or about $100 above present levels. Notice, that the only time the 1-1/2 year moving average was pierced was during the first leg of the financial crisis in 2008. Eventually the gold market righted itself and the secular rally resumed with force.... read more here: http://bit.ly/tHQUyK

A Simple little chart: Gold vs $SPY

This may not warm the hearts of the stock bulls -- many of whom either ignore gold, or just hate gold. The chart below shows gold and SPY. Gold is signified by the candles, SPY is the solid black lines. Clearly it is not a good thing for SPY when gold falls. Gold is actually somewhat of leading indicator as to what may may be next for stocks.

One other notable feature of this chart is the very low RSI on gold as of yesterday (since real time stockcharts.com doesn't display real time gold for some reason). That must come with the more expensive plan that also includes the salad bar. lol.

Gold could bounce a bit, it has today bounced off the lows at this point on extreme oversold conditions. But selling off of any near term bounce could resume in the absence of massive QE. I see vulnerability for the stock market (since it is not nearly as oversold as gold based on RSI) in the near term. This sure is very contrary to the seasonal Santa rally and then the upcoming January effect. But then again. it's not everyday that the market gets to deal with near implosion conditions in the EU.

My Time at Walmart: Why We Need Serious Welfare Reform

December 13, 2011 By crousselle
During the 2010 and 2011 summers, I was a cashier at Wal-Mart #1788 in Scarborough, Maine. I spent hours upon hours toiling away at a register, scanning, bagging, and dealing with questionable clientele. These were all expected parts of the job, and I was okay with it. What I didn’t expect to be part of my job at Wal-Mart was to witness massive amounts of welfare fraud and abuse.

I understand that sometimes, people are destitute. They need help, and they accept help from the state in order to feed their families. This is fine. It happens. I’m not against temporary aid helping those who truly need it. What I saw at Wal-Mart, however, was not temporary aid. I witnessed generations of families all relying on the state to buy food and other items. I literally witnessed small children asking their mothers if they could borrow their EBT cards.... Read more here:

http://thecollegeconservative.com/2011/12/13/my-time-at-walmart-why-we-need-serious-welfare-reform/

The European Liquidation, Gold Under Attack; Realty Games; Sell Yahoo!

12/14/11 Market comment
It appears that there is no joy in Mudville, at least at the present time. The markets remain in a bind over the European situation. While German interest rates are in the region of ZERO, the Italian bond yields have gone where no man has gone before (at a record high already at over ,,,, Please read more here:  http://bit.ly/txLOUf

A Brief Thought on the Stock Market and Markets in General

Which way the markets, everyone is asking. There is a lot of bearishness out there after the failure of the 100+ Tuesday morning Dow joyride.

I would like to remind everyone that the market's don't need to crash. Systemic seizure could easily and simply close the markets for trading for an extended period while they sort things out. Now, tell me, what chart is reflecting that sort of outcome? And yes, such closure would likely result in massive losses when markets are reopened.

Is seizure likely to happen soon? My guess is that there is 10% chance. Seizure would not sit well for a Obama campaign.

Be prepared for the unexpected. Super rally on more QE? That could happen, though we sure didn't get any fresh QE news. Collapsing economies that spark global seizure? The Fed is prepped to do everything possible to stop it, but always expect the unexpected.

In the short term, the Italian bond auction is a matter of hours away. Expect indications of ECB buying, or buying from somewhere to save the day. This could spark a traditional oversold SPX rally. If the Italian bond auction results are poor, or the auction fails -- well you know what will happen.

Just sayin'.

More Farce Confirmation: The National Assoc. of Realtors

From CNN:

Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.

NAR said it plans to downwardly revise sales of previously-owned homes going back to 2007 during the release of its next existing home sales report on Dec. 21.

This blog has often stated that the NAR is simply talking its own book and its numbers flawed. It is amazing that this group is even admitting its sales numbers have been way off.

Music Reflects The Defects of our Culture

I was listening to this great hit by the Eagles. It makes you wonder where all the great music has gone. Today's music if often bombastic in nature and downright violent in its lyrics. It's a commentary on the decay of society in general. And certainly, it's no surprise that our fiat debt system is close to collapsing. What will they do to keep it going?



 

New Blog Look

Sick and tired of that red background. Red is illuminati and we don't want that! lol.

I wanted to try something that's not bright white, but pleasant and relaxing since all of the news is horrible.

12/13/11 The Fed; MF Global; Gold; HR 1540; Cooking Up Stuff at Wal Mart and more...

12/13/11 Market comment
Today is Fed Tuesday. Since It's Christmas time (channeling Band Aid from 1984), I am not expecting much to be announced at 2:15ish ET. Could Bernanke pull one out of the hat and announce further easing (as in gotta keep BofA above 5)? Who knows what schemes lurk in the heart of the Bernank. Also for you know whats and giggles: The Fed doesn't have to announce a thing. Their dollar swaps and digi dollars are always on standby. They are after all (in their eyes), the masters... please read more here: http://www.certifiedassets.com/inv/news/121311-13rd-a-blog-post/

Very cool: The World's Most Valuable Gold Coiin

Check this video out -- Blanchard Sells Brasher Doubloon Gold Coin for Record $7.4 Million http://www.youtube.com/watch?v=sltaQXSr2kk&feature=share via @youtube

Euro Melt Back on (already); Blue Monday for Stocks

12/12 Market comment

As shared over the weekend, the grand Friday EU Summit certainly did not yield any lasting solutions. Already in Europe today, BTPs Yielding 1% More In Two Days Since LCH Margin Cut http://www.zerohedge.com/node/441594. UBS is warning AAA-Rated Euro-Area Downgrade ‘Inevitable’. Add to that, Moody’s is warning of a Euro wide review of sovereign debt. The Italian 10 year is already back to 6.71% and closing in on a 7-handle. Greek CDS and yields... Please read more here: http://bit.ly/s1qQWX Thanks!

France's AAA to be cut this week?

There has been speculation to that effect. Bring it on, this has been too long in the making. That France remains pegged at AAA is ridiculous to begin with and betrays the completely unrealistic realm in which these ratings agencies operate. These countries should all be in the C range, not anywhere near even a single-A!

Sell the rumor, buy the news.

The Euro Non Solution

0

Ummm.. tell me, the big Euro summit has accomplished exactly what? Promises to be good little boys and girls and adhere to “strict:” budget targets? That should have been done long, long ago. The elephant in the room that remains is this issue of sovereign indebtedness and sovereign solvency. Words on nice parchment treaty paper are not going to fix anything. These European problems threaten to drag on for months more, as they now have until MARCH to write a new treaty. God help them if any country decides it needs to referendum the matter and see what its people decide. I suspect something will blow up before March, or there will be some moment of near blowing up that will require some sort of coordinated rescue. The Central Banks see the short term result of their recent intervention and they surely must like playing god (notice the small-case g).
As meatloaf sang, 23 Out of 27 Ain’t Bad, and that’s what we have here. Britain is going its own way and wants nothing to do with this bull ___ (fill in the stinky blank). Britain will ultimately have to face its own fiscal ills and it will do it by itself, or with a little help from a friend (channeling the Beatles): The US Fed, Japan (if they can etc). It is taking the isolationist route. At total debt of nearly 1000% of GDP, it is destined to fail. Light out eventually, good night bub, and without the help of mainland Europe.

G10-Debt-distribution

This sobering chart has been making its way around the net. Yikes!

As for the stock market and gold, the BAD news is going to be GOOD news for the near term. There will be a fairly bullish bias to stocks until the recession in Europe starts to take victims in the U.S. Santa will try to stick around and then take a bow to the so called January effect. Eventually, the IMF is going to attempt to put a fire out, or the Fed will do so leading to more 'hopes' and the speculation that leads to volatility. Remember: The secret to their interventionist sauce, which is really not so secret, is that they are using monetary gasoline to put these fires out. That can only be good for gold in the long run. Long run for stocks? Perhaps not so good as the system crumbles under the weight of tremendous debt. As I’ve previously stated, 10s of trillions in funny money has already been magically produced to save only the banks, and no not by way of dead president notes, but through digital monetary creation of banking reserves which has kept things flowing. There cannot be seizure anywhere and the PTB will see it through for as long as it can.

When you think about it, if UK total debt to GDP is at about 1000%, Japan at somewhere in the 700% range; and both can have functioning societies, then how much time is left for the Fed with U.S. total debt at a “mere” 300% of GDP? This could be a drawn out problem, or am I giving too much credit to the Banksters who are keeping the ball rolling, as evidenced by the latest Wall Street rally? The doomers who are looking for it to all apart very soon, think that I give too much credence to the cleverness of banks who own the Fed in keeping our “system” alive, but hey — this has been an going theme for years. And yes, I am aware that past performance does not mean the same outcome in the future.

I am not saying that doom to the system won’t happen espescially when these excessive debt levels are taken in to consideration. When the paper fiat ponzi fails (since adding new debt to pay old debt is not a solution and will be laughed at by the future generations who will look back at this time), paper will go to its fair value of zero as the punishment for an abusive the system that puts the banking interests before all others in society. This end to fiat money has happened numerous times before. Google “currency death” just for fun.

Gold’s dollar valuation will get jostled as the dollar and other curerncies fall apart, but when all is said and done, gold will remain. It will still have value. That’s the long term key for anyone who is purchasing gold: long term VALUE vs the nothingness of paper when there's too much of it disguided as money (again, this has happened before). Sure, life will manage to go on, but the transition will surely be rotten; the desperation to keep things as they are now will get ugly. A workout of debt that exceeds GDP of many nations is not going to be pleasant. How could it be?

The big question now is timing. You may need to hold your gold wealth patiently for longer than expected and weather the storms. “They” will keep this fiat regime going for as long as possible, and that potentially could mean several years more of miserable extend and pretend. Not rocket science, not fear mongering, it’s a proposition of ridding oneself of the demons of denial and looking at reality. Whether 1000% of GDP in the UK, or 300% of GDP here in the U.S. -- now that's a reality that is not going to go away anytime soon by itself.  The transition out of this debt conundrum will be gut wrenching in the years to come.

Thursday 12/8/11 A Rough Day for Stocks, Gold Falls as Well

When the Dow makes a move of about 200 points (about 2%), or if gold moves by about 2%, I will provide extra market updates when possible. Today the Dow lost 198 points to 11,997 — to finish below the psychological 12k mark.

Gold took a $32 hit to $1712, or a decline of about 2%.

What went wrong for the bulls? In a word, Germany. It is maintaining the stiff upper lip, trying to take the high road on fiscal matters. As I have explained, Germany in particular, is not happy with the southern European part of the EU that is looking for massive bailout handouts. Germany today has shown this resentment .... please read more at: http://www.certifiedassets.com/inv/news/thursday-12811-a-rough-day-for-stocks-gold-falls-as-well/

$MF, the European Non Vacation, Charting Gold $GLD $GC_F

Jon Corzine of $MF infamy is going before the House Ag committee today. Aside from pre-written testimony expect the usual ‘I take the 5th’ dog and pony show. $1.2 bln remains missing at last check.

A late day rumor lifted the Dow to a gain 46 points in the final half hour surrounding talk of a $600 bln lnternational Monetary Fund loan. Those rumors are dead this morning and stocks are set to open lower. Gold is also headed south, as the dollar is up vs the euro on Draghi’s measures (see more below). Markets do not like the 3 yr loan scheme.  Read more here... http://bit.ly/rL1mLm

Long Term Gold Performance Pulverizes Stocks

Over the past 11 years, it's been a nice ride for GOLD while it has not been much fun in stock land. Read more here about the performace of the SPX and Gold. Nothing complicated, just bare bones performance comparing the two. A picture tells a thousand words: http://bit.ly/slroOM $SPX $GLD $GC_F 3gold

Austerity Toilet Paper? SPX Gap Vs Santa; Gold in a Holding Pattern; European Banks Belly Up to the Bar

Let’s start with a product that is near and dear to all of us, but that we don’t talk about very often in normal conversation: Toilet Paper. We take it for granted. There are many choices available at the store for our different comfort levels. You can buy it in large quantities on a Costco run. Perhaps this is an extreme example of ‘austerity,’ but this is the sort of kooky stuff that you will be reading more.... Please continue here.... http://www.certifiedassets.com/inv/news/austerity-toilet-paper-real-money-gold-in-a-holding-pattern-european-banks-belly-up-to-the-bar/

Less Hope Tuesday; Geithner to the Rescue?; S&P and its Flawed Ratings

12/6/11 Market Comment

The Broad Outlook
This is looking like a softer to mixed, maybe higher, maybe lower (who knows) Tuesday for Wall Street. CNBC is headlining Treasury Secretary Geithner and his trip to Europe. Timmy who? I had wondered where this master of funny money ceremonies had disappeared to. Says CNBC, “U.S. Treasury Secretary Timothy Geithne.... read more here: http://www.certifiedassets.com/inv/news/less-hope-tuesday-geithner-to-the-rescue-sp-and-its-flawed-ratings/. Thanks!

12/5 More Rally, Gold drifts, Outlook remains Bullish

It was a wild week for the markets last week and stock markets are off to a strong start today. It is obvious that from an annualized perspective the strong returns for stocks during the past week cannot be maintained forever. There is probably a some more to go in this rally and then pause or even another decline before we see another big burst higher from some other sort of intervention. But think about it, to get a 7% weekly jump out of the Dow required a goosing of the market by the Federal Reserve due to some very dubious circumstances.

Please read more here: http://bit.ly/vpqFBk

$$ Commentary on World Currency Talk $GC_F $SPY $UUP $EURUSD

My opinions on this matter could change depending on future events.

There is a lot of talk about a "world currency". whaaa? Wake up call!! There has been a world currency since the end of WWII. It's called the dollar!

Now, over 60 years later, the dollar is revealing itself as the paper fiat scheme that it became when Nixon ended the partial gold backing the dollar had until 1971. So the "world currency" talk is coming back to the fore. Please click the link to read more, for free. No strings. http://bit.ly/u4TUQC

It's a game, but the stakes are going higher, and its becoming a dangerous game.

Nothing like Fudge!! 12/2 market report

Nothing Like the Smell of Fudge! 12/2/11 Market Comment/Blog $$ $SPY #employment $RIMM

So why am I talking about fudge this morning? As a middle aged man,
fudge is really the last thing I should be consuming. Yet, every month I
receive a generous allowance of fudge courtesy of the Labor
Department’s whimsical monthly employment data. This ‘fudge’ arrives on
the first Friday of each month at 0830 ET. Yes, I am talking about the.... READ MORE....

http://stks.co/1MMy

12/1/11 Market Comment

Morning blog market comment, My Take on the Fed, markets including gold and $SPX $GC_F $GLD $LULU $COST #bernanke

In the not too distant past, I discussed the special money creating app that came with Fed chairman Bernanke’s latest iPhone. It turns out, that he exported the app to various central banker chums around the world. On their conference call on Tuesday, sources tell me, they all called in at the same time to create a sort of app energy force (think Ghost Busters), where they were careful to not cross the streams. This energy force, which promises coordinated Central Bank intervention to prop up credit markets with liquidity did the trick and saved the day. The Central Banks have stolen a line from singer Carole King: “Winter, Spring, Summer, or Fall, all ya have to do is call, and I’ll be there, Yes I will. You’ve got a friend.” They will be there for all of their large banking friends and family. In all seriousness, it’s the potentecy, or efficacy of these injections going forward that has me wondering.

Read more here:

http://stks.co/1LCP

Goldman's Hatzius and QE3

Jan Hatzius of $GS fame sees QE 3 coming during the first half of 2012.

That's what this blog has been saying would happen for quite some time. Expect some pain and plenty of volatility, and up days too, like today before the real QE3 curtain is opened. It will be Maloox country with out a doubt on Wall Street.

Ok, so what does this mean from an investing perspective? It will empower traders once again to bid up shares of stocks. So I would not be surprised to see a fairly large rally for Spring 2012 provided that the world is not turned completely upside down before that point.

Natually, this will help the metals, GOLD in particular. There will be many fools who will not listen and act again. The time is now to be accumulating gold.  QE3 is the fuel that is needed to blast the FED into an orbit of unlimited printing. This can only help gold. $2000 gold looks like a stretch for 2011, but it sure looks like a sure bet for 2012 if Jan is right, and again, there hasn't been systemic failure.

$$ Wednesday 11/20 Trading Desk Color

Our source at broad and Wall emails us with this account of trading desk activity

Desk color: risk-on day.  Early on, there was a lot of covering
but some (small) vanilla buying is starting to emerge as we head into the
afternoon.  The sentiment remains skeptical, w/many people poking holes in
today's actions (a lot even think the US$ swap rate cut was in response to
an imminent crisis that regulators were looking to forestall).  This is a
change from back in Oct where there was more faith in European
policymakers.  All that said, the price action can't be ignored and traders
continue to ask whether we are seeing the start of another Oct-like hope
rally (that one wound up being worth 20%; so far, this one is +7%).  There
is some chasing occurring in those names seeing the biggest moves (esp. the
steels/coals) but overall there is very much a macro focus w/people
buying stocks generally and correlations staying very elevated.  People are
watching 1250 and then the 200day MA (1265). We are likely to see our 2nd 90% up session in the last 3, recall we had 3 90% down days in 5 session heading into Monday...

11/30 Market Comment: Dow Spike Day!

My Blog: Another Dow Spike Day.... $SPY $FXE $GLD $GC_F $BAC $XLF $ADP # China #Greece #Germany #ECB #EU


The stock market is still captivated by each and every headline that comes from Europe. Yes, the problems there are well known yet all they do (whether the IMF, or various Eurozone officials) is talk. Where’s the concrete action? When action happens I anticipate another leg up in stocks. Blithering and breakup... READ THE REST HERE:
 http://stks.co/1Jr2

$AMR

 Hmm, should I get a gum ball with my quarter, or a share of $AMR? That's my two cents on the issue (where the stock may end up going). Right now $AMR is wooing in flies like potato salad on a picnic bench in August. What are they expecting? Some sort of miracle? It's not like an employee is going to discover a ton of gold in the lost and found and save the day.

$FXE Bond market always gives Us Clues First

As we are prone to point out. The Bond market always figures out 'stuff' first.

- ECB’s failure to fully sterilize its
SMP bond purchases today indicates a high level of stress as
liqudity is constrained and banks continue to deleverage, Dan
Dorrow, strategist at Faros Trading, writes in note.
• Failed sterilization shows banks prefering to hold O/n cash than tie up deposits for 1 wk at ECB’s auction: Faros
• The high bank liquidity demand is consistent with other stress indicators including EUR/USD basis swaps and Euribor/OIS spreads: Faros
• 3-mo EUR/USD basis swap -5.7bps to -154bps; most stressed level since October 2008
• Euribor/OIS spread climbs to 0.95, highest since Nov. 3
• Investor base for peripheral bonds have also disappeared, another sign of euro-zone stress, as Italy’s 3- and 10-yr auction both yielded above 7.5%: Faros
• ECB is less aggressive in addressing credit crunch than Fed
• The slower ECB is to respond, the more it will have to ultimately ease: Faros
• EUR/USD may be pressured lower as ECB replaces non-euro-zone investors base via its SMP purchases; many investors who have left may not return for a few quarters, even with a Troika solution: Faros
• ECB may have to cut rates to new historical lows below 1% and also actively expand balance sheet: Faros
• Easing measures to weigh on EUR/USD: Faros
• EUR/USD +0.1% to $1.3338; off session high of $1.3442 following news of ECB’s failed sterilization: Faros

Updated Morning Market comment: including Case Shiller data. More housing Gloom

11/29/11 Morning Market comment The Happy Faces are in for a battle on Wall Street. Futures have faded from the highs on word that American Airlines parent AMR has filed for bankruptcy protection. This offsets (you can’t make this stuff up) news that Italy (more below) managed to complete an auction of 3 and 10... Read more here: http://bit.ly/urC5LN

Morning Market Comment: Italy, European Developments, $AMR, $Tif Greece, Crude Oil 11/29/11

11/29/11 Morning Market comment The Happy Faces are in for a battle on Wall Street. Futures have faded from the highs on word that American Airlines parent AMR has filed for bankruptcy protection. This offsets (you can’t make this stuff up) news that Italy (more below) managed to complete an auction of 3 and 10... Read more here: http://bit.ly/urC5LN

Morning Market comment for 11/28/11

My blog is now up after some technical difficulties. $FXE #IMF $SPY $WMT $TGT $M $ANF $AAPL #Italy #Greece #Germany http://stks.co/1HtL

$$ SocGen Sues a Newspaper For "Disaster" Article

Read Here from CNBC.com http://soc.li/g6HOkrF. The Daily Mail of the UK is being sued by the French banking giant Societe Generale for an article published in August. The paper claimed Soc Gen was on the verge of crumbling. Curiously, the Mail should be responding with guns a blazin', but instead is cowering in a corner.

The truth is that banks have been and are in horrible shape. What is the Mail apologizing for? For US banks, it's clear that shoddy, but legal FASB accounting practices have amounted to these banks having two sets of books a la the worst ponzi and cheating schemes of all time - worse than Bernie Madoff, or even Mr. Ponzi himself. European banks are stuck with a pile of debt that is on the way to becoming huge write downs that will cause them to collapse one by one.

The Mail's biggest mistake? They should have spent a little more time to dig a little deeper and come up with better sourcing for their claims. They would have found it.

Banks have only themselves to blame for their emasculated share prices, the distrust of the people, and the move by people to consider the mattress as a safer alternative to deposit their money. SocGen sounds ridiculous when it claims it has suffered "substantial damage to its reputation and prejudice to its trade.”

I find the suit offensive. It wreaks of the wrath of the banking establishment coming down on a newspaper for saying the wrong things (in the view of the banks). The banking PC way to go is with the meme - 'that we have it all under control' when in reality the banks are actually INsolvent. True, the Mail is often over the top with its news coverage style, selection of stories, interviews, etc., but the Mail is not the authority of the financial world, yet its dose of wake up to its masses readership elicited quite a response. This is not what the banks want. The banks will stop at nothing to advance their all is ok reality. The Daily Mail did what amounts to a big no-no for giving the masses a hint, or two about what is really going on. For the banking cartel, that Freedom of the Price concept is dangerous.

 Even the most clueless must know that banks are still replete with bad assets that date back to a vintage that caused the 2008 financial crisis. Banks are reviled for receiving billions to trillions (the numbers are so big that an exact figure is debatable but still so large that it cannot be fathomed and is thus abstract except to say it was obscene) in government bailout money for taking risks that would make the best of the gamblers in Atlantic City turn red. The MF debacle has already scared many and has caused another leap in distrust of "banks". Stupid ideas like $5 ATM fees haven't helped. And let's not forget, the chief bankers behind their rape of society are still walking around in $2000 tailored suits. 

If you don't think this stuff isn't going on European banking circles, I have a bridge to sell ya. Banks around the globe have killed their own reputations.

The debt situation in Europe has long been festering. The first Greek bailout took place months before the Mail's August article. By implication of the growing problems that were all too clear by August (without the sensationalist news coverage the Mail is known for providing), banks were a marked lot -- marked for troubles.

Not that I'm a fan of the Daily Mail, but it is stupid for it to back down so quickly.

The 2 Yr Belgium is Uglier

This is going to be worse than 2008 since sovereigns are involved this time around. Be wary and prepared.

This is one ugly Picture

Someone sent me this picture. It's the yield on 10 year Belgium bonds....

Happy Thanksgiving to All!

Bunds; Stress; Groupon; MF; Tis the Season; Data Dump

11/23/11

German bunds. What are these to the average person? A special bun for wiener schnitzel? There's a good special going on at the Der Fun chain in the southwest (http://wienerschnitzel.com). Yet these bunds (for German bonds) are having an impact on the markets this morning. The 10 year auction of the bunds is being proclaimed by the Reuters news as the worst since the creation of the euro. Yes, now even Germany is setting off the alarm bells with funding problems. As Tyler Durden writes, one of our favorite market commentators, “welcome to fiat's greatest hits.” Coming auctions from other places will be interesting in the weeks and months ahead – this includes places like London, Tokyo and eventually here in the good old USofA.

With Thanksgiving looming – so much for the idea of a Turkey Day rally week, though you never know what kind of last minute trick will be pulled out of the sleeve to conjure up some sort of cheer amidst the fear. It almost goes without saying that we will see brisk volume into the midday today, but things should trail off as the Wall Street crowd leaves early for a brief break. And that lower volume could bring additional swing potential into the market today.Friday could be a sleeper of a day, but it will depend on global macro events not going haywire while everyone here in the US ODs on tryptofan, gravy, mashed potatoes, string beans, pie, etc.

Stress Tests
The Big Six U.S. banks are to be stress tested again. What silliness. Remember, these are the banks that OWN the Fed and they are now going to be tested by the Fed? Lol. We all know these banks are walking zombies already with two sets of books that enable them to hide their losses and the true reality of what they are, or really are not any more. Again, you have to look at this stuff and be humored. Oh, wasn't it Dexia that made it through the European stress tests with flying colors? Yes, the Dexia that is on the verge of disintegration and threatening to take the make believe French AAA credit with it. Lol. You can't make this stuff up.

Groupon
This space told you that this would be the outcome. Groupon $GRPN IPO Is Officially a Bust http://stks.co/1FSy. I just see it as a lousy business model.

MF
I am not going to let this MF thing go. I hope to have some sort of material everyday on this travesty. Even for the brazen and crooked Chiago commodities market, the MF collapse is an all time low point in the annals of financial history. Here's a good article from an important denizen of stocktwits.com and an active futures trader and guru, Peter Brandt. Peter was once a guest of my Gold and Silver Radio show (goldandsilverradio.com)....

Commodity Customer Coalition forms to reclaim MF Global funds Chicago-based group says it represents more than 7,000 MF Global customers whose money is temporarily frozen during bankruptcy proceedings See story here. Follow the coalitions web site here. It is a … read more.

Tis the Season - Retail Wet Dreams
I promised to write on the coming holiday retail season and my impressions of winners and losers. No sooner had I published yesterday's blog, I received a note a few hours later from fellow blogger and former fellow broadcaster, Wes Richards, of the must read Wessays (http://wessays.blogspot.com/).

"I have some observations on the retail season ... stores, not their stocks. This is based on being married to a champion bargain magnet who loves to prowl aisles (she can spend 5 hours in a TJMaxx, come out with no purchases and tell you exactly what's there and how it stacks up with the competition,) and because I'm writing a book on same based on my own interest and research.

What hurts Best Buy: diminished customer service. Diminished need for expert floor help as people become more knowledgeable about electronics and shift to Costco and its siblings and to Amazon.com, Tiger.com and Newegg. BBY is not competitive on major appliance prices or selection.

Radio Shack: probably gets a boost from it's recently renewed affiliation with Verizon, especially where their other mobile phone products (ATT, Sprint) have inferior signals. But overall, they're in trouble from the same competitors as BBY and because there's no margin in some of the small stuff they sell.

What hurts mall Jewelers (Kay, Gordons, etc.) overpriced, complex conditions in their warranties. Increased competition from TV shopping channels (primarily the smaller ones, JTV and ShopNbc.)

Macy's: the last traditional mid-line department store chain standing. They have a pricing policy that seems completely unrelated to their costs, which means somethings there have to be overpriced to make up for all the cutting they do in clothing and accessories. They've recently ended their contract with the outfit that leased the better jewelry department and have started running it themselves.

I expect good holiday results from the high-end chains, Nordstrom, Bloomingdales, Saks, Lord & Taylor, Neiman marcus.

What hurts Walmart: bad front ends. Walmart is a store of last resort.

Target: trying to promote itself as low priced non-walmart walmart. People are attracted to logical displays and decent checkout. They're going big into groceries, an iffy, low-margin, high shrinkage area.

Costco benefits from consistently good Consumer Reports ratings on their house brands.

TJMaxx & Marshalls: TJs are better run than marshalls, and both are more upscale than prime compeitor Ross. Smaller space means more $$ per square foot, for what that's worth.

Bed Bath: overpriced, and a bad stop for claustrophobic shoppers. Sloppy front end.

Sears: Eddie Lampert hasn't killed it yet. But wait until there's a rebound in real estate and they and k-mart are gonzo. Lands' End probably will survive because of a huge loyal customer base. But they, too, are hurt by the Eddie connection and by regular free shipping from LLBean."
–
Data Dump Day
Today has been a big data dump day. None of the numbers have cheered Wall Street.

-Initial Jobless Claims 393K vs 390K Estimate. Yawn.

-October Durable Orders -0.7% vs -0.9% consensus; Prior revised to -1.5% from -0.6% . Capital Goods Fell 1.8%, vs. Cons. -1.0%. First, that revision stinks to high heaven and is typical of the faulty data that markets depend on. Secondly, what the heck is going on in the capital goods space? That is one ugly number. I suspect that the economist crowd is way to complacent about the chances for another official recession. Taking it deeper, if there is lacking capital goods investment, there is then little hope these same companies are further investing in human capital buy doing more hiring.

-Oct. Personal Income Up 0.4%, vs. Cons. 0.3%; Spending Up 0.1% . That spending number sure is shabby.

Have a great Thanksgiving.

Credit Expert Janet Tavakoli and her take on $MF

We can't let "them" get away with this!

This pdf is MUST read: http://stks.co/1ERS #Corzine

A TV Anchor in Russia GIves A Salute to Obama

Fascinating that this goes on the MSM in Russia.

3rd Quarter GDP Revised lower

The economy of the United States is growing at a revised 3rd quarter annual rate of just 2%. In other words, it is plodding along at a .5% rate on a quarterly basis. This is a nada, nothing, virtually unchanged and this from the official merry, lithium like figures.

Economists had been expecting a 2.5% print. ha! Wrong again.

Personal consumption grew at a 2.3% annual rate. That is certainly nothing to write home about. People had better have oodles of cash saved from their Christmas Club accounts to extract some sort of Q4 miracle. Do I detect a hint of doubt about that notion?

Market Comment 11/22/11: European Woes; Gold vs Stocks; MF disaster

11/22/11

Follow the bouncing ball – otherwise known as the stock market. Yes, JP Morgan, as in the original John Pierpont, was right when he was purported to have said of the the stock market, “it will fluctuate.” And so the Wall Street Maalox market plays on. This morning stock futures are saying there's a diminished chance for a turnaround Tuesday after a Monday that saw the Dow give back 248 points to 11,547. The S&P 500 landed at 1192. The problem again this morning that has taken futures off the highs is Europe. Spreads are widening something unbelievable again to the 200% range and bonds of various EU nations are getting hammered.

When the Dow was down over 300 at the worst of it yesterday, the 3-month treasury bill was the magnet for money looking for near term safety. For a time, the the yield on the 3 month dropped to 0.00% and is holding at .01% this morning. That is not a positive near term sign for stocks as it indicates another large move out of the stock market to hold something that will pay nothing in yield, but with the promise of getting the principle back. What a concept!

As for other flight to quality areas. The dollar got little love as the UUP (PowerShares Dollar Index) finished off the highs, but managed to nudge above the 22 level. In spite of the pronouncements of a strong dollar in the mainstream, the UUP is down from its peak earlier this year of near 23, but did manage to find support just below 21. This narrow and downward trending year long pattern shows a lack of enthusiasm for the greenback even as the euro is on its death bed. Hmmmm, I wonder why? In my best Mr. Rogers voice: Can you say, “fiat” and “massive deficits”? Thought you could!

So there's the on going market irony. The dollar drags along (admittedly bouncing from the March lows), but has largely moped while Treasurys, priced in these dollars, attract money because they are perceived as a safe haven! Yes, the market is an entertaining place.

At one point yesterday, Gold was down $50/oz. But let's remember, behind a 20% rise in feeder cattle this year, gold is up 19.2% in comparison to a 1.3% Dollar decline and a 4.7% S&P 500 drop. On a monthly basis, the stock market indexes (or indices, if you prefer) are also red, while gold even with yesterday's drop is up 3.5% for the month. In other words, don't be fooled by the daily moves that we are seeing in gold. The picture remains very green for the year.

By the way, for the year, the Utilities stock group has been the best performer, up 9% YTD. The worst performers – the Financials, down a whopping 23% this year. Healthcare is the only other positive performer this year with a 2% gain. Go to finvez.com for further details. I bring this up only to show, again, the mess the stock market is in vs the double digit gain for gold this year. It's two different worlds. And there shall come a time when investors will flock to gold as the real haven (sensibility shall return), but the entrance will be a small one – like fitting a camel through the eye of the needle – stealing from a classic New Testament biblical reference. The time for amassing gold is now and not at a future point when everyone will attempt to crowd into it.

Unfortunately, $50 moves are going to happen in gold (we'll likely see even larger moves) to jostle the unaware and the weak hands. It's the glaring defect of the system that we're in. Something with core intrinsic historic value is priced in a sinking value asset – in this case gold being priced in paper dollars. It's what we must live with for the time being.

Moving on to a few other items of note

The $MF situation looks worse and worse as we telegraphed at http://www.financialbalerdash.com yesterday. Credit expert Janet Tavakoli weighs in with this assessment. It' a pdf that should shared among your investment friends. http://www.tavakolistructuredfinance.com/MFGR.pdf

Analysts are so useful. Canaccord Genuity resumes Netflix as a Sell. This coming the morning after the company announced plans for a stock dilutive $400 mln convertible notes offering to raise $200 mln in cash. The stock is at $69 pre market. The conversion price is $85. It bought back $200 mln shares of its stock this year at over $200! Very funny stuff!

Let's talk economy. One of my favorite economists who I often interviewed at CNBC, Paul Kasriel, of Northern Trust sees a lost decade coming for the EU. The EU is the world's largest economy. You've got be asking yourself how this is going to impact the global economy and the U.S. Economy. http://stks.co/1ELP . I like Kasriel because he accurate. He is not part of the 'consensus' community of economists who have only declared recession when we're actually in one. Kasriel is ahead of the curve.

Even more to ponder. From Stocktwits: RT aliadi US GDP no longer enjoying export advantages of weak $USDX. PCE starting to top out. wheres growth coming from? #forex. Good question.

I love Amazon... http://stks.co/1E7Z, although its stock is certainly vulnerable to market declines.

Speaking of retail. Best Buy and Radio Shack are not long for this world. BBY is said to be removing tradition bar codes from products to keep consumers from using their smartphones to compare prices on their shopping jaunts. BBY is so losing. Radio Shack is in the same antiquated category. I will have more on retailers tomorrow from my own channel checks and the impressions that I get from my teen daughter.

I remember having involvement in setting up this story when I was at Fox. How Turkeys are processed: http://www.youtube.com/watch?v=YVl_xl3_LHI&feature=colike. Classic.

Focus Media has been grabbing headlines. The real pain – the analyst experts on Wall Street who recommended it. The stock is down 66% since. http://buswk.co/tydweo.

$MF Warning

$MF victims: Watch out for scammers who purport to represent the SIPC in emails. The SIPC doesn't do things that way. Don't fall for any scams and lose even more money!!!!!!!

So Gold is Down $50?

Gold down about $50 today. As mentioned, gold gets caught in the cross hairs of the crumbling fiat system because it is priced in dollars. Some see this as an abstract concept, but it is really not since long before there was a dollar there was always this medium of exchange called gold. Gold's intrinsic value has existed for as long as it has been available to use as a means of exchange. Paper? Is just that, paper, with virtually no intrinsic value. Long after the dollar is gone, gold will still be there and will still have real value. Use gold now to translate dollar paper value to the core intrinsic value of gold that will always be there. It's that simple. These daily price swings don't matter since the premise of pricing gold in fiat dollars is faulty to begin with. Dollars and their declining value have only proved the point that gold is a lasting medium of exchange while paper dollars have been steadily sinking. So gold down $50? no big deal unless you're gaming gold to make a quick fiat buck.

$MF Global is One Giant Mess

Outright thievery has occurred. Here are some heads moving on the financial wires:

MF Global Trustee says current plan to distribute 60% of what’s in segregated customer accounts for U.S. futures positions would require ~$1.3b-$1.6b, or nearly all of the $1.6b of assets currently under Trustee control.
• Apparent shortfall may be as much as $1.2b or more, above prior est.; says numbers are preliminary and may change
• Trustee to date has brought ~$3.7b under his control; has distributed ~$1.5b in collateral, is currently distributing $520m cash, leaving ~$1.6b

Fright to Quality

3 month treasury yields are again 0.00% as investors flock to the safety of short term U.S. debt. This is a movie that has played before.

Credit Suisse and the European Outlook

This is ugly folks...

 “Extraordinary” things need to
happen by mid-January to prevent progressive closure of all euro
sovereign mkts, runs on even strongest banks, Credit Suisse’s
Jonathan Wilmot says.
• Market pressures may effectively force France, Germany to
strike “momentous deal on fiscal union” much sooner than
currently seems possible, or than either would like: Wilmot
• Only then will ECB will agree to provide necessary bridge
finance: Wilmot
• Italian, Spanish 10-year yields spiking above 9% for short
period “not something one could rule out:” Wilmot
• "Quite possible’’ will see French yields above 5%, bund yields
rise during “critical fiscal union debate:” Wilmot
• U.S. bond yields may fall – or at least not rise – despite
improving growth data through end-year: Wilmot

The Writing is on the wall. France in trouble

The old joke with the little ones...I see England, I see France, I see your underpants.

An email just arrived:

France Warned on Outlook for AAA Credit Rating By Moody's
2011-11-21 14:38:08.761 GMT


Reuters
    Nov. 21 (Telegraph) -- Moody's warned France that a
sustained rise in its debt yields coupled with weakening economic
growth could harm its ratings outlook, fuelling concern the
eurozone's second largest economy might lose its AAA status.
    Worries about a high fiscal deficit and banks' exposure to
other troubled European sovereign debt have drawn France into the
firing line of the bloc's crisis, despite the government's
insistence it would do everything necessary to protect its top
rating.
    Moody's announced in mid-October it could place France's AAA
rating on negative outlook in three months if the costs for
helping to bailout French banks and other eurozone members
overstretched the country's budget.
    Today, the rating agency said that a worsening in the French
bond market - amid fears the sovereign debt crisis was spreading
to the eurozone's core - posed a threat to its credit outlook,
though not at this stage to its actual rating.
    "Elevated borrowing costs persisting for an extended period
would amplify the fiscal challenges the French government faces
amid a deteriorating growth outlook, with negative credit
implications," Moody's said.
    The premium investors charge on French 10-year debt compared
to the German equivalent was up around 20 basis points at 163 bps
following publication of Moody's report but remained well short
of the 202 bps hit last week, a new euro-era high.
    Moody's said that at last week's record level, France pays
nearly twice as much as Germany for long-term funding, adding
that a 100 basis point increase in yields roughly equates to an
additional €3bn (£1.9bn) in yearly funding costs.
    Many investors have already discounted a downgrade to
France's AAA rating, given expectations its economy will enter
recession next year.
    "In the current environment, people are expecting France to
be downgraded," said Olivier Bizimana of Morgan Stanley, saying
it appeared likely Moody's would revise down France's stable
outlook if nothing changed.
    "The fiscal position is probably worse than other triple A
countries and on top of that you don't have the back up of a
central bank."
    France's AFT debt agency said on Monday that, despite a
recent increase in the spread of French yields over benchmark
German debt, its average medium- and long-term financing cost
remained close to historically low levels.

The Financial Labyrinth; The Stupid Committee; Bullish on Gold

The Financial Labyrinth
While on our coin adventure in Baltimore, my 7 year old son Nathan and I, went back to the hotel for a little R&R. What does he decide to watch on tv? No, not the Cartoon Channel, but a History Channel show about Greek mythology and the myth about the dreadful and dark Labyrinth on the Island of Crete. In a strange sort of way Greece and all of the debt laden countries of Europe today are seemingly trapped in a Labyrinth and about to be devoured by a debt monster. Some things never change.

The European conundrum drags on. After a few days of being away from the paper markets and seeing brisk activity at the Baltimore coin show, it's back to the reality of watching these fiat markets. As more panic sets in to sell a bunch of euro debt-junk, I picture a long line of cars waiting to go through the tolls. The wait is getting so bad that two cars at a time are trying to go through. Watch for signs of further disorder in the European bond markets in the week ahead. There's only about a Trillion in Italian bonds that need redistributing. Yikes.

I've said in the past that the euro in its present form is a goner. The big guns are now chiming in. The math says it, the setup and other problems make it a certainty that there is no certainty in the euro. When a guy like  Warren Buffett comes out of the woodwork and gives a thumbs down, there's trouble as in spike (not a nail) in the euro's coffin. Read here: http://soc.li/QA06NLN

What moves are left in the Chess game? The king should have died but is still moving around on the board on "hopes" something can be done.  Every little piece of "hope" news that has come out is akin to the opponent repeatedly checking the king and the king stepping away to the net square for brief relief. Seems like it's time to fish or cut bait as in either European mass unity/disunity/accord/discord to unite and print new euro bonds like mad, or call the whole EU thing off due to irreconcilable differences. IMHO the real key holder is Germany. If they walk, we're going to see some very negative stock market action. There is good reason for Germany to walk. It is solvent and its is adverse to monetizing debt through printing. Yes, they still remember the Weimar inflation/social disaster that ignited a variety of problems that led to the rise of you know who in the 1930s. Yes, without Germany, the euro forces could still go the route of printing and give themselves a little more time, but printing to add to debt that is already bad debt is not the way to go.

When and how the euro is taken off life support is the question. Markets in general will be pummeled for a time and it could be that since the markets are discounting mechanism that much of the dump will come ahead of the actual demise of the euro. We could see a circuit breaker type event day for Wall Street. Even our dear friend gold could take a shellacking since the fiat bunch are well trained to sell everything and flock to the dollar.

Printing euro bonds, we know, would be a temporary stop gap, but if they can do it they sure will. But Angela has got to be paying attention to what is happening to her ilk Spain. We are seeing the winds of change. The socialists are getting ousted in favor the conservatives. Spanish Voters Set to Throw Out Socialists in Election. Germany's Merkel has got to be pay close attention. In the end, she's out to protect her own neck and though she is pretty much a communist, she will not risk the wrath of the German people over debt monetization. Remember, the Germans just recently completed paying reparations for WWII and also recently experienced a more than $1 bill to unify with East Germany. The people there, as far as I can tell, are not in the mood to bailout all sorts of  distressed countries. The recent whispers are not surprising: the Germans are already readying a supply of paper d-marks in preparation for the demise of the euro as me know it.

Some of the canaries are still flying around, meaning not dead yet, but their fate might not be too positive. Here's an indicator to watch. The TED spread. Wiki has a quick definition for those who are not familiar: “The TED spread is the difference between the interest rates on interbank loans and on short-term U.S. government debt ("T-bills").” It's on the rise again. Not a positive. The trouble with this indicator is that it can slowly rise and then boom – it skyrockets. At 50 basis points, the spread is at its maximum historic norm which usually averages around 30 bps. During the last crisis, TED ballooned to 200 basis points. Keep at eye on it. http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND.

The EIB bond spread (European investment bank bonds) went berserk on Friday. A Bloomberg terminal grab from Zero Hedge. My goodness... http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2011/10/20111119_EIB_5Y%20EUR%20denom%20bond%20spread%20exploded.png

So the financial system is stressed. No rocket science there. The primary push back to the euro's demise comes from banks and insolvent players (the countries) who want to continue to sell their debt no matter what the cost of fresh funny "munee" is. Banks on both sides of the Atlantic face huge liabilities. Its not just the potential for $300 bln in losses directly from bad loans for trans Atlantic banks (read some of our biggest in the U.S, as in the usual suspects), it is also the more than $1+ tril in derivatives that are tied to the bad loans. These numbers are in the realm of bank killer territory. This is a battle of epic proportions and the death of the euro will be a huge reality check for the many. especially in Europe. It will answer that mystery question that most have. How is money valued? (I get that a lot, and from smart people too).

The Stupid Committee
And if all of this wasn't enough to add to the investment gloom, we have our own bunch of monkeys in Washington – The Super Committee, failing to engage in good representative representing. Their task was to forge an agreement to at least show a pretense for fiscal rectitude, although their original goals actually included NO plan for cutting our debt, only to cut the rate in which it grows, which is complete folly to begin with. But I digress. Bottom line, we're back to the threat of another debt downgrade by S&P as the nation will go on some sort of politically concocted fiscal autopilot as we have now crossed the $15 trillion official debt number – which is actually quite a bit higher if you include off budget items, the insanely bloated Fed balance sheet, etc. Just sayin'. This time S&P may be joined by  Moody's ad Fitch.

There's little doubt in my mind that we are about to see some interesting fireworks not only in the markets but to societies. Because of its people, its size, resources, etc., the long term outlook for America should be bullish (should be, but we are almost as divided as the nation was in 1860); there may be many pieces to pick up to resume that bullish U.S. Outlook. I'll just briefly mention that our consumerist driven system has a symbiotic relationship with China. Our success with the far east will be more important than ever in the years ahead. Even if the American way of consumption (2/3rds of our GDP), is turned upside down for a time due to system difficulties, China and Asia cannot be ignored in the future. In a post euro and eventually a post dollar hegemony world, everyone will still need to not only get along in the sand box, but will need to be healthy.Economic balance and the madness of giant trade deficits and surpluses must arise from whatever happens in the financial world. That would be a huge positive outcome. However, China and Asia have been shifted to the back burner (at least in financial news coverage although there were some Yuan headlines tis weekend). If Europe finances do collapse and there is an ensuing major economic downturn across the pond, what impact does that have on China and thus the U.S? Yes, we are global in a village sort of way. That's a far more important question that we will explore in future blog posts.

Ultimately, as the fiat paper world is unraveled. gold and other metals will be standouts. Central banks know this, and according to the World gold Council stepped up gold purchases in the last quarter. While it may not become part of regular main street transactions, some form of a monetary gold standard of exchange is going to be necessary to bring a modicum of economic balance back. But there is a catch. If you look back historically to periods of the gold standards of the late 19th century, money supplies could vastly change, banks could fail and economies could suffer (real business cycles as opposed to the perpetual growth models of large corporations and what the Fed has wrongly attempted to do to 'save' the economy). That is to say, a gold standard will only work if society can live within its means. That could be a gut wrenching time of transition for the West and for those who supply many of the goods.

Economist Nouriel Roubini was harping over the weekend about the gold standard and bank failures in the 1930s. He is exactly right. Bingo. It was a reduced gold standard by that time, but there was still gold backing. What went wrong, Nouriel? Fractional Reserve Banking. I don't think Nouriel understand this and I will be responding to his tweets later today. As long as there is Fractional Reserve Banking where the bank receives, as an example, $1 from a saver and then lends out $10, the system is geared toward failure no matter what the backing. The future will not be allowing Goldman Sachs to be levered 40 to 1. That stuff must go away. The flip side of this coin, is that the world will eventually come to realize that fiat currencies are just no good. There will be gold backing, BUT other major reforms will also have to be implemented.

In other words, pay no heed to the smoke and fire of the short term. Gold is a keeper for the medium and long term. Whether the system comes to its senses, or we go hyper inflation Mad Max, gold will always be there and will always have value.

CNBC: Buffett Doubts Euro Survival

Folks, this blog has been saying this already, The euro is doomed. The math says it, the setup and other problems make it a certainty that there is no certainty in the euro. When a guy like Buffett comes out of the woodwork and gives a thumbs down, there's trouble as in spike (not a nail) in the euros coffin.  Read here: http://soc.li/QA06NLN

Coin Funds Are Back, Europe, U.S. Super Committee, China Warning

11/20/11

I was at the Whitman Coin Show in Baltimore Thursday through Saturday. It was excellent show made all the more exciting as I witnessed the launching of Certified Assets Management International. Company co-founder and co president, Robert Higgins, and his team are a force to be reckoned with in the coin and bullion business. For people like me of modest means, this stuff is eye candy, yet for others the trading of high ticket, museum quality rarities occurs on a regular basis on the bourse floor: Photo of the Day – Keep the change… for $300K. Also very exciting is the launching of five new coin funds that offer investors a viable alternative to the weak performance of the benchmark S&P 500. Details are here: http://www.certifiedassets.com/inv/the-funds/coin-funds-overview/. Yes, finally alternatives to $GLD, $SLV, etc.

The Financial Labyrinth

While on our coin adventure in Baltimore, my son Nathan and I, went back to the hotel for a little R&R. What does he decide to watch on tv? No, not the Cartoon Channel, but a History Channel show about Greek mythology and the myth about the dreadful and dark Labyrinth on the Island of Crete. In a strange sort of way Greece and all of the debt laden countries of Europe today are seemingly trapped in a Labyrinth and about to be devoured by a debt monster. Some things never change.

The European conundrum drags on. After a few days of being away from the paper markets and seeing brisk activity at the Baltimore coin show, it's back to the reality of watching these fiat markets. As more panic sets in to sell a bunch of euro debt-junk, I picture a long line of cars waiting to go through the tolls. The wait is getting so bad that two cars at a time are trying to go through. Watch for signs of further disorder in the European bond markets in the week ahead. There's only about a Trillion in Italian bonds that need redistributing. Yikes.



What moves are left in the Chess game? The king should have died long ago but is still moving around on the board. Seems like its time to fish or cut bait as in European mass unity/disunity and unite and print new euro bonds like mad, or call the whole EU thing off due to irreconcilable differences. IMHO the real key holder is Germany. If they walk, we're going to see some very negative stock market action. Markets in general will be pummeled. We could see a circuit breaker type day for Wall Street. Even out dear friend gold could take a shellacking since the fiat bunch are well trained to sell everything and flock to the dollar.
Printing euro bonds, we know, would be a temporary stop gap, but if they can do it they sure will. But Angela has got to be paying attention to what is happened to her ilk Spain. We are seeing the winds of change. The socialists are getting ousted in favor the conservatves. Spanish Voters Set to Throw Out Socialists in Election. Germany's Merkel has got to be pay close attention. In the end, she's out to protect her own neck.
Some of the canaries are flying around, meaning not dead yet, but their fate might not be too positive. Here's an indicator to watch. The TED spread. Wiki has a quick definition for those who are not familiar: “The TED spread is the difference between the interest rates on interbank loans and on short-term U.S. government debt ("T-bills").” It's on the rise again. Not a positive. The trouble with this indicator is that it can slowly rise and then boom – it skyrockets. At 50 basis points, the spread is at its maximum historic norm which usually averages around 30 bps. During the last crisis, TED ballooned to 200 basis points. Keep at eye on it. http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND.



The EIB bond spread (European investment bank bonds) went berserk on Friday. A Bloomberg terminal grab from Zero Hedge. My goodness... http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2011/10/20111119_EIB_5Y%20EUR%20denom%20bond%20spread%20exploded.png



As if all of this wasn't enough to add to the investment gloom, we have our own bunch of monkeys in Washington – The Super Committee, failing to engage in good representative representing. Their task was to forge an agreement to at least show a pretense for fiscal rectitude, although their original goals actually include NO plan for cutting our debt, only to cut the rate in which is grows, which is complete folly to begin with. But I digress. Bottom line, we're back to the threat of another debt downgrade by S&P as the nation will go on some sort of politically concocted fiscal autopilot as we have now crossed the $15 trillion official debt number – which is actually quite a bit higher if you include off budget items, the insanely bloated Fed balance sheet, etc. Just sayin'.


Oh, the stresses are all over: Can Europe's Crisis Force US Funds to Break the Buck?

There's little doubt in my mind that we are about to see some interesting fireworks not only in the markets but to societies. Because of its people, it's size, resources, etc., the long term outlook for America should be bullish (should be, but we are almost as divided as the nation was in 1860). But there may be many pieces to pick up to resume that bullish U.S. Outlook. Perhaps things are getting overblown concerning the woes of Europe and its impact on the U.S (though there are many debatable points, and we certainly have big problems here to tackle), but China and Asia have been shifted to the back burner. If Europe finances do collapse and there is an ensuing major economic downturn across the pond, what impact does that have on China and thus the U.S? Yes, we are global in a village sort of way. That's a far more important question that we will explore in future blog posts.   

European Mess, Celente Gets Burned. Gold, Jobs Trade $$

I am heading for Baltimore for a little end of week coin confab. A few things (and I mean a few. Lol) are on my mind.

1. Europe. Europe's €1 trillion (£854bn) rescue fund has been forced to buy its own debt as outside investors become increasingly concerned about the worsening eurozone sovereign debt crisis.
   [link to www.telegraph.co.uk]. The only answer to this debt conundrum is print, print, print. And they shall. French and Spanish bond auctions were weak meaning higher yields, or more dead canaries in the coal mine.
2. Gold. Down, despite this certainty of mad printing, down again today. It remains subject to the whims of fund managers and the like who need to lighten up when their paper “investments” go up in flames, or are about fall off a cliff. Yet, there are buyers who support the gold market. Take Central Bankers, please. Apologies to the great Henny Youngman. But in all seriousness, central banks are buyers: CNBC: http://www.cnbc.com/id/45335415.
3. This again says to me, be patient with gold even if the price is volatile since it is priced in volatile dollars. It's at a bargain price. Physical gold, especially rare coins. Did you hear about futurist and doom and gloomer Gerald Celente having his hind quarters handed to him at Mann (MF) via the CME and Lind Woldock?  http://www.youtube.com/watch?v=W02n-wjPqNE Please pardon the giggly anchor. The video is not really funny.
   
4. Jobless claims at 388k (lower). Color me a skeptic. Millions are off the government's jobless benefits and no longer eligible for benefits. It will be interesting when the job leavers and those who have run out of benefits start being tabulated again as part of a group of renewed job seekers.. The UNemployment rate will actually rise thanks to the screwy way the data is thrown together. Is this the excuse for Wall Street to rally today? Or is the prize behind door #4....
5. Housing starts were stronger than expected. The smoke and mirrors used here center around strong multi family unit construction. Single family starts? Dead. The crowd could choose the 'reality' door and well that would result in what we saw yesterday: a little withdrawal of the "hopes".
6. Gee Wally, how does this happen? From Zerohedge.com: “The export miracle, that we have been cantankerously remonstrating against the possibility of for much of the last year, appears to be running into a wall of reality. The Economist puts its usual number-centric and acerbic spin on the nonsense that economists spew with regard to everyone exporting their way out of the debt-laden deleveraging quagmire we are in. Economists are constantly urging governments to adopt policies that would reduce global imbalances—which, in crude terms, means that China should slash its current-account surplus and America its deficit. Yet they ignore the biggest imbalance of all: the current-account surplus that planet Earth appears to run with extraterrestrials. The world exported $331 billion more than it imported in 2010!”

jk here: I'll tell you how. From trade formulas created in the 30s. Shhhh. It's a deep and dark little secret. Yes, the Fed has it backwards. Perhaps we need LESS consumption? Wouldn't that be a shocker.