Wednesday, August 31, 2011
And its not going to be long. Brasil lowered interest rates by 50bps unexpectedly last night due to unexpected deterioration of data. As Gomer Pyle used to say... Suuprize suuprize suuprize....
Then of course our fudged jobless numbers will come out this morning...Market Consensus Before Announcement
Initial jobless claims in the August 20 week 5,000 to a seasonally adjusted 417,000 but were skewed higher by a labor strike at telecom provider Verizon that has since ended. The Labor Department says there were at least 8,500 claims related to the strike in the week and at least 12,500 in the prior week (these levels are before adjustment). The four-week average ended its seven-week run of declines, rising 4,000 to a 407,500 level that shows a 7,000 improvement from the month-ago comparison.
Here is the anticipated response.......so what? Reality is....its done for and WE KNOW IT! SO......WGARF (you fill it in)
We're in a bad spot with a ramped market elevated to a sugar high from the candyman Dr. Bernanke....thats triggered riots and political upheaval globally due to his exported inflation and now he's entered the danger period. What's the danger period? He knows very well that the "extend and pretend" to "work out" the excesses so that a deflationary washout can be avoided is hanging by a thread. He knows that realistically he gets one more shot at immortality. He misses this next "bazooka move" and the "danger" will erupt.
This is the part that doomers get giddy about. War, pestilence, global starvation....end-o-days stuff. The kind of scenario that Celente drones on about.
Nearer term we get a choke and puke with a readjustment of the markets so that we can at the very least retest the lows or whatever it takes to bring in some cash sitting on the sidelines to give us our next market move. Maybe we get the announcement at the next Fed meeting in a couple of weeks....but I'm not convinced that we'll get the low then. Without a real market beatdown before the meeting then the meeting may turn out to be a sell the news event. It doesn't really matter now...the market is going to tell you. Keep a heavy cash position until the market cracks. Trade around your core and remain CAUTIOUS.
Posted by kliguy38 at 10:32 PM
Tuesday, August 30, 2011
Will it happen again here? First of all, unlike the last time no one owns gold any longer other than the well healed upper class. Its the currency of "Kings" ...remember. We only have so many Kings and they are in the distinct minority. The growing class here are the peasants and they own no gold.
Roosevelt issued and executive order in the Great Depression in an effort to boost velocity of money. Executive Order 6102 was signed on April 5, 1933, by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States". The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.
The order was rationalized on the grounds that hard times had caused "hoarding" of gold, stalling economic growth and making the depression worse. The New York Times, on April 6, 1933 p. 16, wrote under the headline "Hoarding of Gold," "The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding. On March 6, taking advantage of a wartime statute that had not been repealed, he forbade the hoarding 'of gold or silver coin or bullion or currency,' under penalty of $10,000 fine or ten years imprisonment or both." from Wikipedia.
Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. Most citizens who owned large amounts of gold had it transferred to countries such as Switzerland. Even back in the 30s this was a monster for the feds to enforce. The Gold Reserve Act of 1934 made gold clauses unenforceable, and changed the value of the dollar in gold from $20.67 to $35 per ounce. This price remained in effect until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange.
Another rumor that no proof exists for was the confiscation of safety deposit boxes by Roosevelt through an executive order. Examination of the actual Executive Order as issued shows that this text never appears in it. In fact, safe deposit boxes held by individuals were not forcibly searched or seized under the order, and the few prosecutions that occurred in the 1930s for gold hoarding were executed under different statutes. One of the few such cases occurred in 1936 when the safe deposit box of Zelik Josefowitz, who was not a U.S. citizen, containing over 10,000 troy ounces (310 kg) of gold was seized with a search warrant as part of a tax evasion prosecution. In 1933 approximately 500 tonnes of gold were turned in to the Treasury "voluntarily" at the exchange rate of $20.67 per troy ounce. from wiki.
Not a bad haul in gold though was it?? 500 tonnes can go a long way in shoring up some shortages in your reserves though.
I don't see your gold getting confiscated but I guess one never knows. There are a lot of ways they can disrupt the trade but ultimately as noted in 1933 it is an unenforcable law in many ways.
Posted by kliguy38 at 10:25 PM
The yo yo market has left many traders whipsawed into confusion, exhaustion, and MISTAKES. Pros AND retailers. This is where leverage can destroy you completely and the recent action of the market as I noted was an indicator that policy decisions from the FED had indeed changed.
Initially the health of the market and the picture of CONfidence was considered to be vital to restoring velocity of money as more peeps became confident that the "economy" was improving and spent that dollar. Of course it was improving with over a Trillion of stimulus and 8 Trillion of Fed intervention it could only go up from the nadir of early 2009...but the GDP growth was trully abymal. I've beaten this dead horse too many times but there was virtually NO ATTEMPT AT REPAIRING the STRUCTURAL impediments to the recovery of the economy and the concomittent UNEMPLOYMENT. STRUCTURAL deficits CANNOT and NEVER have been resolved with monetary policy. I will NOT go into the structural issues.....why bother.... NO ONE SEEMS TO CARE.
We have juiced the economy for the last thirty years with MALINVESTMENTS from hot money put into "housing" ....creating construction jobs for mostly males that are now GONE for "mostly males". There is nothing out there for them and there is nothing that is going to be out there for them. The liquidity behind all of this still sits on the banks books in the form of TRILLIONS of derivatives that FAR outweigh the underlying mortgages that were created. These derivatives are hidden for a reason. THEY ARE NOT FOCHING REPAIRABLE. THEY are in the TENS of TRILLIONS. They would make anyone with a high school algebra class toss his cookies if he looked at them. But of course you will NOT be shown these "weapons of financial mass destruction".
Reminder: Tues 08/30/11 buy physical gold and silver....keep stocking food supplies...buy farmland....recheck home safety precautions...power alternatives...water storage etc.
Market strategy.....caution here but a strong core AND cash position of miners recommended. In no particular order...EXK...AG...SVM....RIC...GFI...SSRI...GPL...EGO...ANV...SLW...PSLV and PHYS for physical play on gold and silver.
We are in the late stages of the pump or the early stages of the collapse of the pump.....I pick the latter. This is where things get way too unstable in this market so make sure you are prepared. Confusion/delusion will be the purpose of many of the voices we hear on out so tune out the noise. I'm holding approximately 50% cash. I have a few shorts the rest are miners and PSLV. I won't committ any heavy cash beyond the 50%except for short term trades. gl all
Posted by kliguy38 at 12:02 AM
Sunday, August 28, 2011
Chances are that many of you never come into close contact with the impact of QE on the most vulnerable of not only our society but the global society that it impacts. Putting a picture up does not really do it justice. I could have selected more graphic examples to show you but then does it really matter? Smiling, bright faces with so much potential but their future hinges on something that we take for granted...nourishment. We have gorged ourselves on plentiful, relatively cheap food. Our current attempts to reflate a staggering debt they we have binged on is dragging down the poorest across the world. This will not end well for anyone. This is how REAL wars begin. Not faux wars like we have been creating in the name of patriotism. Sure...if you bought into the Cheney doctrine that we deserve to do anything the biggest bully on the block desires to do without regard to any laws....international or ortherwise then perhaps we can make a case for our continued interventions. Just one problem....we can't pay for it any longer. That's how empires end. That is how we are going to end. Its inevitable and there is nothing we can do to change that. Whether you can make a case that everything we did over the last 20 years or more with our foreign interventions to support our Multinational corporatocracy was justified or not just really doesn't matter. You only need to do your math. You say you don't understand. You say its the Unions. You say its Social Security. You say its a bloated Federal bureaucracy. Well perhaps there is a modicum of truth to elements of all of that. Certainly abuses took place in all of those. But the real expense that KILLED us. REALLY KILLED us was the false reality created that we were under constant Attack with fear driving the incredible budget the military industrial complex sucked from the future of this country. Eisenhower warned us of this. It was breathtaking that a president would end his tenure with that warning yet NO ONE paid a bit of attention to it. The banker owned media buried it file Z and labeled Ike a moron.
The 60s ushered in a "new beginning" and a dashing new President with Ike dissappearing into the country club set and hole 19s. Control of all information by the bankers was already well established and Ike's warning was a mere formality to deep six.
Soon we were immersed in a new "war"....Vietnam. WWII...Korea...all history. Something new happened with Vietnam. The public became disenchanted with these forays into resource rich developing nations that they knew little about. Especially when 56 thousand boys come home in body bags. The boyz in control needed to modify their plans. First up was to create their own Centurions. So the "All Volunteer" army was created. After all if you had a volunteer army you didn't have anyone crying about getting "drafted" against their will. Not everyone could avoid the draft like Cheney, Pearl, Wolfowitz, Rumsfeld, Bush and others did. Of course you had to make sure there were outstanding candidates so amplifying patriotism and creating scholarship programs for military service provided an increasingly impressive pool of soldiers. As the middle class came under increasing economic pressure the military became even more impressive. Ouila....you had the Centurions that had been planned.
Alas just as in Rome all empires will come to an end and so will ours. Unfortunately so will the rest of us living here. At least in terms of our current level of oppulence. Will we create a new World war with our disruption of a fragile World population living off of dwindling resources. Will our fight to remain the bloated bully on the block create a conflagration of biblical proportions? I don't have any idea. I do know that trouble is ahead and you better be prepared.
We're traders here and we're going to use this forum to try and bring information forward that hopefully will make you money or help protect you. Keep stacking the physical gold and silver. Keep storing the food.
Posted by kliguy38 at 9:03 PM
Thursday, August 25, 2011
Traders are transfixed as they await directions to the yellow brick road. As we get ready to trade on the news of the next monetization pronouncement the empire is engaged in at least seven conflicts with boots on the ground around the world. We of course try to down play five of these but never the less we are in places like Libya, Sudan, Syria, Yemen, Pakistan, and MORE (see map of most of the world). Now back to your regularly scheduled program. Ben gives the market a pep talk today. He plans on droning on about how monetary policy is prepared to provide support to the markets and liquidity if needed and that the chances of recession have increased but still remain relatively low. Even though he will do whatever it takes to keep capital flowing that he has limits in terms of creating jobs. (This will be the part where you want to listen closely. voice clears again... ben speaking...Without the involvement of coordinated strong fiscal policy the structural impediments to job creation will remain in effect for the foreseeable future. (rubs nose and drinks his water) he proceeds...Not only is it difficult to see these problems changing in the near term but visibility for their improvement remains opaque. The Fed will maintain agreements with Central Banks for currency stabilization while the monetary stress remains high. he then continues with some blah blah and some more blah blah.
In other words ....the wizard is ready and willing to fire his bazookas. The problem is we are already in QE3 and 4 and 5. We have opened up swaps with open market agreements with Eurozone banks pumping in hundreds of millions of greenbacks. OR...how about the "guaranteed zero interest rates for two years".....These measures are exporting inflation and the developing countries will come under increasing stress and destabilization. Ben knows it and he knows he's between a rock and a hard place. He also has NO clue or ability to create jobs. Giving the banks trillions will not create jobs. It will only fill black holes. You will continue to hear the words CONfidence and FEAR dozens of time every hour on CNBS. They cannot exist together. They are mutually exclusive. Without CONfidence there is NO velocity of money. With FEAR...there can be no CONficence restored. 80% of the US population is one social security check or one pay check away from BROKE!! Do you really think with that level of debt and lack of savings the consumer is suddenly going to start growing the economy and spending?? GOOD LUCK with that one.
Monetization will continue. It has to. Without it the whole enchilada collapses. You bring in a Volker now and its instant depression. Why do you think they shipped him back to Manhattan in 2009 after 40 seconds of listening to his recommendations.
Nothing will change to improve this. At least until we get "bad enough" and are forced to. We are paralyzed by a corrupt system controlled only by greed, money and the human spirit...GREEEEED! What can I do to help my country is NOT foremost on people's minds. Its how do I save my ass. gl... We are traders here and we make money but that doesn't mean we have to turn off our minds.
Posted by kliguy38 at 10:22 PM
Wednesday, August 24, 2011
vi·sion·ar·y/ˈviZHəˌnerē/Adjective: (esp. of a person) Thinking about or planning the future with imagination or wisdom: "a visionary leader".
Noun: A person with original ideas about what the future will or could be like.
Rarely does one have the opportunity in today's business world to see the rare combination of a leader/inventor/visionary that is able to navigate the cross currents of deception and betrayal that so characterize our current corrupt corporate world. I still recall when Jobs turned Apple over to Sculley...the much heralded CEO from Mickey Ds. It was duly noted in the press as a necessary and much needed step for Apple to take so that it could swim with the rest of the sharks on Wall Street. After all, Steve Jobs was the heart and soul of Apple but without a true Corporate leader of Sculley's pedigree Apple just could not grow. Well it did grow. It grew into a company of cameras and toasters......it became a joke. Sculley even managed to fire Jobs. Finally the coup de gras was Gil Amelio. Apple was flat on its back and had become a footnote in the world of computers by the time they brought Jobs back.
By now his genius was established with the development and success of several companies of his own. The rest was history with Apple. Without a doubt one of the most amazing turn arounds in history and also without a doubt due entirely to Jobs. He provided an inspiration to people that believe the evil empire can crush all human endeavors. He never gave up.
Job's contributions have affected people all over the world and elevated the human spirit. He loved his work and even as he fought for his life he maintained his love for his company and its people. Good luck to an extraordinary figure and may he go in peace in the remainder of his time on this earth.
Posted by kliguy38 at 10:18 PM
Nature does not. This essay has a purpose and it's to challenge your preparedness. I am well aware that most of you have done nothing to prepare for shortages of food or water or energy. That is just human nature. The changes that are coming will not just be economic they will also be spectacularly ecological at times. There is no reason to enumerate the potential catastrophies that are going to befall the unsuspecting masses as we stress the planet and encroach upon the limits of its sustainability. We have gone long past that barrier years ago. Now we are just skipping rocks on the edge of the abyss. It can last years longer or it can end rapidly for many sectors of the globe as imbalances created by the current economic crisis put these areas in jeopardy. As more natural disasters tax existing infrastructure and the ability to respond... the likelihood of a repeat of the Katrina debacle will increase. Imagine as we enter into a devastating deleveraging across this country that saps the municipal and state agencies' resources AND we layer on a series of devastating natural catastrophes. Sounds dramatic but probably more likely than an apocalyptic end of the world catastrophy. These events have a profound impact on limited resources and can trigger wide ranging public mood breakdown.
Our planet has a limited ammount of resources. Let's assume for arguments sake that NO apocalyptic event ends our earth as we know it. What is more likely are man made and nature made shortages of precious resources in the NEAR TERM. Can you provide for your family if dislocations take place over a period of weeks? Months? Or longer? While we play in the casino I only want you to look around you long enough to be aware that simple precautions now will protect you from sudden dislocations created by looming economic problems and unforseen nature events. THEY DO HAPPEN and they are happening with greater frequency. Don't expect a drowning government to take care of you if these events increase in frequency. Maybe you are uncomfortable with letting your family or neighbors believe you are too doom and gloomy. Maybe you believe they will recommend a visit to a therapist. Fine....get a little courage and leadership in your life and let them know (with a SMILE) that it doesn't hurt to take simple precautions. The disaster you see above happened in my back yard. Thousands of people in a matter of seconds were homeless and many were killed. Most had made no preparations. I suggest that when damaging earthquakes happen in non-earthquake regions of this country you may want to make some plans. Water, food, heating, emergency shelter, etc. Not just guns and ammo. Get involved....do some DD.....Chuck's commentary is not extreme. Wake up.
Posted by kliguy38 at 12:10 AM
Tuesday, August 23, 2011
Well overnite futures show some buoncy but will they end up like recent rises with a quick look above the water and then a fast submersion? Gold needs a severe beatdown but like most sneak moves the trade continues to race while most retail are standing by waiting for the perfect reentry. The only thing that makes this parabolic move tolerable for this participant was the paper position in the miners that I have taken which also threatens to show more upward movement here...and of course my PSLV position that has actually outperformed gold percentage wise.
If you don't realize just how treacherous things are then note that Soc Gen is involved in a full bank run. They will not let this bank go down. At least not this year. Don't expect much more than a bump within yesterday's SnP rectangle to play out. I included an SnP 2 day chart for some resistance levels in green.
$HUI is a break out now we are getting some real strong candles in the miners and I expect follow through....with one big caveate. If they beat down gold here the miners will certainly follow. If you have a large position then at least take some profit in the near term....but an aggressive hold here just might hit a homerun. You're the captain and you have to take the shot.
Joe expects some of our energy plays like ATPG SGY to really bounce hard when "the bottom" is hit. We aren't there yet. Also watch ALU. Opportunities for buy and hold (at least for a month or so may arise in some of these beaten down players....again...we arent there yet.
Right now I'd like to see a push back up to 1200 for some short entries but that may take some antics from the Fed......so shorting will depend on how the market responds BEFORE the Bernank speak on Friday. gl all
Posted by kliguy38 at 1:34 AM
Monday, August 22, 2011
Easy money made on the short side short term. Now its the oversold choke train game. How much money can we get into the game before the trade turns. If you recognize what happened two Mondays ago when the Dow was crushed over 500 hundred points after the SnP downgrade of the U.S. debt AND the preceding political song and dance game for show....then you know that the big boyz pulled the OFF SWITCH. That's the opposite of the ON SWITCH. In a rigged market that is technical terminology for "we're goin' DOWN". Not just down in the market but down in the overall world economy. There is virtually no bright spot in this game right now. Cycles dictate that we take a breather on our monetization binge before we blow our election cycle payback schedule for the current administration of the Empire without Sun. Unless we want to start the meltdown this week in a big way then liquidity for a drowning EU banking system has to be opened. Since we are the big printer it will be gentle Ben that opens up the swap spigot for the Eurozone.
This is where it will get interesting though. QE2 was a stealth bailout of the Eurozone and political backlash was minimal for gentle Ben. The next bailout is not going to go down as easy. It will need to be swathed in baby clothes and chocolate. Ultimately it will be recognized but the key right now is not so much painting the market tape for CONfidence as opposed to getting 50billion a month into the Euro bank run to stem that disaster. Ultimatel all of this will be bullish for the PM trade but not necessarily for the stock market. Good short squeeze this week coming and you don't want to be on the wrong side of it. The better trade might be the Ben trade. Ben speaks on friday. I'm betting on him. I'm betting two ways. One...He rallies the market Friday and two he fails to deliver the goods. That's right two bets......btw they won't be big bets. When I say he fails to deliver I mean the long anticipated QE3 announcement won't be made. The timing isn't there yet. We need more blood before they pull that pin...if they EVER do.
Look for some announcements out of the administration to try and soothe the markets this week regarding fiscal stimulus. It will have to be a mix of tax cuts and incentives for job creation. NONE of which will have much real impact but should give some "Breaking News" bump from the MSM. We're talking serious trouble right now and they aren't going to sit on their hands without taking at least some free shots to slow the slide. Of course you know who will be ahead of the Breaking News loaded on the long side as usual.
Thats the dice game you're in right now. Its loaded and you need to be too to play. Gold is breaking out as is silver and for now a lot of momentum is behind it. Look for some more parabolic move before the crush this trade....and they will. Its too easy and the weak hands need to get picked clean. My guess is they will hit it right after or right before 2000 cross for a battle. Maybe a coordinated effort to rip the trade. I don't see it getting much below 1700 but I'll decide when I see what their effort is composed of. Unless they solve the insolvency of the Eurozone and ours too then Gold's not going for the major dive yet....it'll just feel like it though. Remember 200-300 pts would be fairly brutal. We're in a vortex now and its not going to be reversed by monetization...just altered with brutal squeezes and trading. I would like to offer you sage advice but I don't really have any. This is end-o-days stuff for market traders. The last two weeks were only a taste of things to come.
Posted by kliguy38 at 12:12 AM
Friday, August 19, 2011
Where is the Bernanke put? Maybe all of those doom and gloom nut jobs on their blogs were right. Maybe we are headed into a depression.
I'm certain those thoughts are entering the mind of many Wall Street traders that have the economic experience that can fit on the end of a thimble. The past three weeks have been a severe blow to the extend and pretend crowd. Can they turn it around again? In short.....no. Can they squeeze the shorts until their gonads begin to pop out of their ears. ABSOLUTELY and don't you forget it. Will they? 100% guaranteed.
This is the part that tests your thesis and your ability to understand the global economic structure and the mechanics of the market structure. In other words you better have been paying close attention to the political and economic lessons that have been discussed here over the past two years. Joe, Red, and many others here have a knowledge of the participants in the mechanics that make the wheels turn and if you have tried to follow their comments and the posts you will be better equipped to get through the coming Kondratieff Winter than most.
Most sheeple are still wondering how to pay down their debt AND buy a new hot tub. They really have no clue what the coming storm is about to bring. Of course some have a feeling of impending doom or vague fear of losing their job. Other than what the MSM feeds them they cannot react. They have frozen 401Ks and retirement accounts that will bear the full brunt of a liquidity trap/collapse.
We just finished with a two year Bull Market. It was designed to bring CONfidence to the sheeple and try and heal a global liquidity collapse by buying time. Now the CONfidence part of the equation is destroyed. So now the real game begins. This is the type of market that the top of the food chain likes. This is where the tiger rules and the harvest of the weak begins. The best advice I can give to most of you is to get out of this market and go to PMs, food, farmland, rural areas to live (at least get out of major metro areas) and prepare for rough few years. Most cannot or will not make these changes and will freely choose to try and play in this game of top predator takes all.
If you have a 401K you can "borrow" against it for instance to buy farmland but you MUST consult a qualified accountant to tell you how to accomplish this within the framework of the law. SEPs and IRA rollovers are easier to use for "other investments" but again you must consult a qualified accountant to advise you. Closing these accounts outright will cost you dearly with taxes and penalties. For some this may be acceptable.
Look for a massive effort by the Central Planners to put some brakes on this next week and shove a lot of the shorts over the cliff. I have no idea what their next form of QE will take but it will be a massive attempt of monetization that will focus on the Eurozone.
Posted by kliguy38 at 1:41 AM