Bill Cara’s Blog for Aug 7, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

New York Governor Andrew Cuomo carries a big stick in the fight against banksters, one that has wacked UK’s Standard Chartered Bank (STAN.L) between $5 billion and $10 billion in loss of market cap and potential fines and loss of business.

In October 2011, Cuomo set up a new agency for the state of NY, the Department of Finance, to censure bad banking practices. In the biggest accusation yet, the agency believes that Standard Chartered has acted illegally in its dealings with Iran, and may move to fine that bank over $1 billion and remove their license in NY.

http://finance.yahoo.com/news/standard-chartered-big-target-agency-04125…

Traders have heavily sold the stock today, presently down almost -25%.

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Other banks are now also under closer scrutiny.

This situation is mostly about globalization and international politics, a real minefield for bankers who manage operations around the world.

Until the facts come out, my only comment is that cross-border banking is burdened with so much regulation that (i) banks will need to restructure accordingly, and (ii) investors will have to seriously reconsider risk/reward in this industry.

In broad market action, the US Dollar is softer, which, despite the knock against the banks, is lifting commodity and equity prices.

Have a good day.


Good morning, Geoff here.

I have used this basic chart in the past to show you the relationship between the US Dollar and risk assets. If the Dollar is topping, risk assets will rise.

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However, the Dollar looks should be approaching time to for a countertrend rally so the recent rally in stocks and commodities may take a breather soon.

A few weeks ago I gave you the 1400 target on the S&P 500 if the dollar was topping. The S&P 500 met that target yesterday and is about 1.5% from the 2012 highs. It also hit the top of the flatter channel as momentum is weakening. As you know, we are long, but we are approaching the time to be looking for a move down in the short term. Complacency is high, we are approaching strong resistance, we have nice gains…taking gains is never a bad idea so we will be looking to do so on sell signals.

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However, should the S&P 500 move lower, it could be in the short term. I think that the big move on Friday was the market coming to grips with what we have been saying for months – regardless of what they say, Central Banks will provide liquidity to the system and that liquidity will drive markets higher.

These charts look good for the Bulls for a few more weeks:

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The Junior Golds look pretty good too and check out the money flow into CEF, which we are long both. Both are now over their EMA 8:

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So; overall, things look good for our longs for at least a couple of more weeks, but signs are building to take gains on sell signals should you be so inclined. That view would be negated by a Dollar rallying news event.

Have a great trading day!


Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.

Symbol Name Last Trade Change Related Info
^ATX ATX 2,033.17 6:45AM EDT Up 7.17 (0.35%) Components, Chart, More
^BFX BEL-20 2,321.00 3:04AM EDT Down 18.00 (0.77%) Components, Chart, More
^FCHI CAC 40 3,418.14 6:59AM EDT Up 16.58 (0.49%) Components, Chart, More
^GDAXI DAX 6,943.61 6:45AM EDT Up 24.89 (0.36%) Components, Chart, More
AEX.AS AEX General 331.85 6:45AM EDT Up 1.45 (0.44%) Components, Chart, More
^OSEAX OSE All Share 482.67 6:45AM EDT Up 3.08 (0.64%) Components, Chart, More
^OMXSPI Stockholm General 329.52 6:44AM EDT Down 2.37 (0.71%) Components, Chart, More
^SSMI Swiss Market 6,441.20 6:45AM EDT Down 21.81 (0.34%) Components, Chart, More
^FTSE FTSE 100 5,800.26 6:45AM EDT Down 8.51 (0.15%) Components, Chart, More
FPXAA.PR PX Index 911.40 6:59AM EDT Down 2.30 (0.25%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,444.05 6:45AM EDT Up 6.75 (0.47%) Chart, More
GD.AT Athex Composite Share Price Index 620.83 6:45AM EDT Up 12.21 (2.01%) Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.


Cara 100 Company research notes from brokers

Raymond James Report on SLW

Aligning Expectations Ahead of the Quarter: We are updating our expectations for Silver Wheaton’s 2Q12 financial and operating results ahead of its reporting on August 9.
Recommendation
We are maintaining our Outperform rating and US$42.00 target price. Silver Wheaton offers investors above average exposure to the silver price and strong margins, with over 90% of its revenue generated from the sale of silver bullion while maintaining a largely fixed cost structure (both on capex and opex). At current levels, we believe Silver Wheaton offers an attractive entry point for investors.
Analysis
Several companies that Silver Wheaton has streaming agreements with have reported 2Q12 operating results. As a result, we have taken the opportunity to include these actual results into our expectations for the quarter (all production below is considered attributable to SLW).
– Cozamin – Produced 429,000oz of silver for the quarter. We had been looking for 425,000oz.
– Mineral Park – Produced ~140,000oz of silver for the quarter vs. our previous estimate of 150,000oz.
– Minto – Produced 53,000oz and 3,200oz of silver and gold, respectively, for the quarter. We were forecasting 75,000oz and 3,700oz.
– Peñasquito – Produced 1.6Moz attributable to SLW of which 1.37Moz was sold (RJL estimates). We forecasted 1.3Moz in our original estimates.
– San Dimas – Produced 1.36Moz ahead of our estimate of 1.1Moz for the quarter.
– Zinkgruvan – Produced ~673,000oz of silver for the quarter, ahead of our initial estimate of 475,000oz.
Valuation
Silver Wheaton is currently trading at 1.0x NAV, above the primary silver producer group avg of 0.8x. Our target price is based on a 1.6x multiple given our view on SLW’s growth, risk and fixed cost (at current prices 0.8x NAV).

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Vad’s Catch of the Day


Kaimu’s Sound Money

NET DEBT EXPLOSION

It seems the US Treasury just blew the doors off their “net debt” line item on Wednesday, July 31st with near a $60BIL increase …

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As you can see that puts the FY2012 YTD net debt much closer to $1.2TRIL and it only took Congress ten months to do! My calculator shows a sum of $114.3BIL per month. Just under $500BIL left until the Debt Ceiling is breached. At the current rate of increase based on net debt that leaves 4.4 months until Congress is faced with another “Debt Circus” of epic proportions. This time around because they could not agree on austerity of any kind last time they debated the debt ceiling Congress will be forced to make automatic budget cuts based on the Budget Control Act of 2011. That prospect would automatically put a dent in any kind of “recovery” the US economy was hoping for. That would also put a big dent into any Capitol Hill politician getting re-elected since federal budget cuts of 10% would increase unemployment significantly and fly in the face of the union vote. We would see a labor market ripple effect starting in the public sector and rippling through the private sector that depends on government contracts. With less employment you get less Social Security and Medicare revenues coming into the US Treasury. At the same time those newly unemployed would be filing for unemployment and EBT immediately. To keep the PRICE FIXING 101 model solvent that would require additional debt issuance at the US Treasury. Is there a chance Congress would repeal the Budget Control Act of 2011? No, it is a cold day in hell when Congress repeals former Acts, but they regularly modify or create new ones to either lessen the prior Acts effects or nullify it. Also there are already talks in Congress to exempt Social Security, Medicare and Defense from any or partial “sequester” (austerity).

In terms of net tax revenues for July 31, 2012 I see only $1.45TRIL. If you subtract the new debt from net tax revenues you only have a difference of $310BIL. Maybe in a year or so net debt will equal net tax revenues on a daily basis? That could happen if the federal government were forced to cut their payroll and the domino effect hits the private sector.

To make matters worse on July 31st net outlays (gross outlays minus debt redemptions) at the US Treasury were running at $3.5TRIL in a ten month time period.

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Then we have this line item …

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That is how much the US Treasury pays on debt interest with the Fed Funds Rate at 0.25%. Imagine what that number would be with a Fed Funds Rate at 1%; four times …

The city of San Bernadino, California is in bankruptcy, so the municipal bonds are not looking too great as a long term store of value. I guess Goldman Sachs derivatives could not hedge the union pension and benefits for retirees. What city is next and then what State? Who will rescue this debt dynamic set in motion? All that is left is our central planner and its ability to issue and redeem debt. Not a very fiscally sound footing for America’s future, not to mention its reserve currency status. Another Congressional debt circus in four months will assure another ratings downgrade. It will certainly cause concern in the global community as to why the US Treasury and the US Congress should be exempt from any of the current global austerity tearing the EU apart. After all Nixon told the World in August 1971 we were all Keynesians now …

TAX AND LOAN OR I WANNA BE A US FED MEMBER BANK WHEN I GROW UP!

Crazy title, but as you will see at the end of this I’m not off base at all! What comes to my mind when I see the phrase “tax and loan”? I picture the US Treasury over at the IRS taxing its citizens and then loaning those funds. But to who? Who gets those loans? Are they really loans?

First off why should we care? And secondly, where and when did this come up?

To answer the secondly stuff first here it is at the very bottom, left corner of the US Treasury Daily Statement in small font …

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Some of you will recall that I alluded to this “note” before in a prior SOUND MONEY, but I did not elaborate. Now I will!

What is it anyway?

Anyone here ever been in business and made payroll tax deposits before? I have PLENTY of times! You go to the designated “depository bank” and you hand them a slip of IRS paper declaring your deposit and then you hand them a check written on an account with “sufficient funds”. I always thought those payments were transferred immediately to the US Treasury account at the Federal Reserve. I was even told by the bank tellers many times this was what happened. Maybe it was a long time ago, but times change.

Here is what the NEW YORK FED says about those funds …

Purpose of the TT&L Program
Treasury Tax and Loan (TT&L) accounts consist of federal tax payments made directly by business firms, and other federal payments that are deposited in TT&L accounts indirectly. The TT&L program aids in maintaining the stability of financial markets by reducing uncertainty about the supply of reserves in the banking system and simplifying the Fed’s implementation of monetary policy. This is accomplished by having tax payments deposited into TT&L accounts at depository institutions, rather than in the Treasury’s accounts at the Federal Reserve, thereby allowing the tax payments to remain in the banking system. In the absence of TT&L accounts, tax payments would generate abrupt changes in depository reserves.

“Remain in the banking system …” What?

What? Well, what I get is that these US FED member banks use our tax dollars to bolster their reserves and their requirements for reserves. Kind of like a short term loan that they do not pay interest on. In the US FED’s own words …

“The TT&L program aids in maintaining the stability of financial markets …”

What should happen is that every US company or individual depositing payroll taxes into those depository banks should get paid interest on their funds as if we are making short term loans to those US FED monopoly banks. Is there a lot of money involved in this bank freebie?

Look and see, as of June 27th. I don’t know is $701BIL USD a lot? It used to be a lot back in TARP days!

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It seems not all of those payroll tax funds are transferred to the US Treasury account at the US FED. Only 80% are and then the rest are in “Note Option” banks …

Over 80 percent of the TT&L institutions are collectors that transfer funds to the Treasury’s accounts at the Federal reserve the same day, or after, they receive them. The remainder are “note option” depositories, which hold the tax funds longer.

What happens there?

Unlike collector depositories, note option depositories may hold TT&L balances for an extended time period. As a result, note option banks have use of the Treasury’s funds for loans and investments and are required to pay interest to the Treasury. The interest rate is determined by subtracting twenty-five basis points (one-quarter of a percentage point) from the average federal funds rate for the week during which the balances are held.

Okay gotcha! They are held for an “extended time period”. If that isn’t enough those funds are lent to these Note Option banks with a 25 basis point discount on the Fed Funds Rate(FFR). Since the current FFR is at 0.25% that means these funds are virtually “free”! These banks act like they are doing us a favor! Now that’s what I call a “discount window”! As you can read in the paragraph above these banks use 20% of all payroll tax funds in the USA to either “loan or invest”. Based on the amount I listed above from the YTD FY2012 US Treasury 20% comes to $140.2BIL USD that is loaned to US FED monopoly banks at 0% to invest in the supposed “free markets”! Now if these banks use any derivatives leverage on that $140.2BIL like they did in the MBS and CDO days then we are looking at a sum over $200BIL! I want to be a US FED member bank! No wait, I wanna be one of those NOTE OPTION banks!

As a business owner I have been late depositing my payroll tax deposits a few times and if you are even one day late you get a 100% total ream job from the IRS in interest and penalties! They make you look and feel like the criminal you are and yet these banks take 20% of my “late funds” and bet against me in the markets. It is almost as if TT&L could someday be or is MF GLOBAL! The potential is there since US FED member banks are gambling with my payroll tax funds. What happens if they lose those “leveraged” funds in derivatives? Well, that is where the US FED comes in as they will buy up those losses, those toxic bets and save them on their Balance Sheet for a time when they can unwind them for a lesser loss or maybe even a profit. SWEET! I was a complete idiot when I was kid. At first when I was five years old I wanted to be a “garbage truck driver” when I grew up! It looked like they had a lot of fun hanging on the trucks! Then as I got older and realized garbage was not the optimal classy profession I decided I wanted to be a photo-journalist. Boy was I a total dufus my entire adolescence! What every kid in America should aspire to be is not President of the USA or a lowly doctor or loser lawyer, but be a US FED MEMBER BANK! Man, man oh man, that’s the ticket! Do that and you’ve got it made!

SUB THIS

Another angle to payroll taxes is government subsidies for payroll withholding. Who knew? I hear how upset some get that oil companies get so many subsidies, yet the truth is all US corporations and banks get subsidies in one way or another. Many, like banks especially, get subsidies yet produce no profitable, job accretive product.

Take a look at some of the government subsidies strictly based on withholding income taxes. A minor part of the overall subsidy programs offered by all government levels, but still you can extrapolate from here. You will notice Goldman Sachs on the list for a total of $108MIL, as if being a US FED member bank was not enough subsidy in itself.

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Who do you have to sleep with to get these huge subsidy “awards”? Top of the list is a foreign car manufacturer … Nissan! Does GM get payroll subsidies in Japan?

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http://www.goodjobsfirst.org/sites/default/files/docs/pdf/taxestotheboss…

“A fact without a theory is like a ship without a sail. Is like a boat without a rudder. Is like a kite without a tail. A fact without a theory is as sad as sad can be. But if there’s one thing worse in this universe, it’s a theory . . . without a fact.” – Milton Friedman song for his 90th birthday party

FED ACTION VS HUMAN ACTION

The difference is one is not attempting to control the masses and the other is! I guess you could say all central banks and especially the US FED, being the reserve currency central bank, are “control freaks”! That to me is the complete opposite of the intent of the US Constitution. It flies against any principles of Life, Liberty and the Pursuit of Happiness. It flies against freedom and free markets. As any of us may know from personal experience we get duped any time we try to “control” something or someone. What we find out is we really have no control. To think with this huge universe and gazillion cellular and molecular structures of every person and thing on Earth is “controllable” seems “instant insane”! But, apparently both of the two “control freak” monopolies that are barriers to true Freedom, the US FED and the US Congress, seem to be gung-ho on the prospects of “making it happen”. I am here to tell you it isn’t going to happen, because like so many other Empires in past human history the US Debt Empire will fail. At this point “good intentions” are a farce and need not be included in any sort of conversations. My bet is every US Senator and Representative of the “Gang of 535” knows this. Even the President and the entirety of all other government agencies have trouble believing this can go on forever status quo. My thinking is that they have abandoned that illusion of Supreme Empire and still hold the belief that they can somehow retain power through the difficult “anti-debt” transitions that lay ahead. The two monopolies are behaving like all true monopolies and making contingency plans to preserve their monopolies at all costs. That means saying anything and doing anything that gives them even one day of extra control. Yet, I also believe there is a faction that is more elite than the daily government and banking “news faces” that are playing the hand of “planned chaos” (PC). This all disseminates as intervention at the highest levels and at all levels. But the old rule persists and “power corrupts”! Corruption is rampant and more chaos makes more rampant corruption. It is the same paradigm as “more debt”! And there is the basis of money in our modern world.

Never mind the huge and highly impressive technological advancements; the corruption paradigm does not care. The elite “PCers” will persist until ultimate chaos is on our doorstep. Historically, that usually means war. However, this time they have a monkey wrench in the works called the internet and “real time”. Unfortunately business is super entwined in cyberspace and so are the masses so to cut one off means cutting the entire economy off. That is a formula for immediate destruction of the dual monopoly power base. You see dictators in the Middle East attempting to cut off the social media and you see how well that has been working for them. It hasn’t … is the short answer! In fact it has only hastened their demise. The Arab Spring stands as a stark reminder to the Western “control freaks” just how uncontrollable the masses truly can be. None of the dictators were remotely prepared no matter how much military paraphernalia they possessed. Maybe that will be a “clue” for the Western governments now facing control headwinds. Such events are in line with the C WORD.

OPTIMISM PLUNGES

Over at the NFIB-National Federation of Independent Business their infamous Optimism Index for Small Business took a dive for the month of June and is expected to dive further for July due to the ObamaCare court decision that came out in July. Here we see the Index reflects lows from April 2008.

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In terms of labor markets this caught my eye in the report.

LABOR MARKETS
Forty-four (44) percent of the owners hired or tried to hire in the last three months and 33 percent reported few or no qualified applicants for positions. The figures suggest that job creation has been very weak.

Amazing … really … “few or no qualified applicants”? With all the student debt and the rush to improve skills and get more degrees it is odd that such a statement should exist. That “33%” number is not a small number either. Perhaps this is a statement on public school education. Or is it that all those degrees were for Investment Banking and Stock Broker licenses? Now what? Hire better qualified foreigners?

In summation the Optimism Index report said this …
The Index plunged 3 points in June, that’s a lot. The 10 Index questions lost a total of 30 percentage point in net favorable responses. The impact of the SCOTUS decision on health care will show up in the July survey as it occurred late in the month, ditto for the transportation bill which didn’t make much of a news splash. The health care decision was probably not what most owners expected, so “disappointment” over that will be reflected in the July survey responses. With over 20 new taxes ($800 billion) and most of the regulations yet to be written by HHS, the implications for employee costs remain unclear.

The rumored hiring of thousands of IRS agents to enforce the health care rules will certainly add to employment and Gross Domestic Product (GDP) since our accounting rules simply assume that the value of the output produced by a government worker is equal to their wage. An equal number of workers using their personal savings to produce a new service that did not sell would add nothing to GDP as no sales were registered and no income received. Job creation will be very weak in June and plans for July look even worse, so there will be very little progress on the jobs front in the coming months.

http://www.nfib.com/Portals/0/PDF/sbet/sbet201207.pdf

Accounting rules assumptions? My, oh my how those rules have changed over the years. Take your pick GAAP and NON-GAAP FASB applications as well as the vast array of new tax law and government regulations. It all adds up to a “no confidence” vote in government by small business owners. As a small business owner I will throw my hat into that ring as well.

Great to see job growth over at the IRS! Government largess is a growth industry! More to come …

DBA FOREVER?

The main reason America and the rest of the World are in the current indebted positions are due to the politicizing of both public and private labor. Too many promises made and too little actual net tax revenues to pay for them. In one simple concept “government is over extended”. In America there is a monopoly on labor rates, which is “price fixing”. It’s not some secret society or elite con job it’s an actual 81 year old law that Congress passed in exchange for votes that had good intentions and bad ones.

“The value of a government worker is equal to their wage.” In terms of the Davis Bacon Act (DBA) and prevailing wage standards you must first define “wage”. By the Davis bacon standard “wage” is simply the hourly rate, but in terms of the small business owners outlays and overhead the wage rate is like the tip of the iceberg since attached to that wage are all the benefits and accounting costs and training costs associated with each worker. Let me show you what I mean. Here are the tables for Prevailing Union Wage Rates in Hawaii County in the State of Hawaii. Even if you are a non-union contractor you must pay DBA rates on a Public Works project. My stint as a non-union contractor on a DBA project I was hiring documented Mexicans and paying them Labor II rates of over $20 per hour, more than double their rates for mowing your yard! Luckily I lived in Maracaibo, Venezuela for many years and could speak and write Spanish. A tremendous advantage on all Public Works projects in California as most laborers and concrete workers are Mexicans.

I have mentioned this before but you have to dig right into the actual numbers to get a grasp as to how seriously flawed the system is and why we will, as a country, be indebted forever or go broke. Neither of those options makes any sense, but since when did politics ever make sense? It makes for a corrupt crony capitalist system from the top down though …

This example is for a basic laborer under classification “I and II”, which includes “ditch diggers” listed under Laborer II. Let’s just figure only the total cost for a “ditch digger”. If you add up the wage rate, which is $27.70USD per hour and the “fringe rate”, meaning benefits you get a total of $43.61 per hour. Say you had this “digger” working all year or 2,040 annual hours then you overhead just on direct DBA cost would be $88,964.40USD! That is for a worker with no real skill or degree and in my past experience maybe even some bit of minor criminal record. In one instance on the Corcoran State Prison job I was in California the Fence Contractor had a scheduled labor inspector on the next day and half his crew had to quit due to their criminal past. Here you have criminals building a jail. Okay never mind the sweet ironies of life, but you get my drift with respect to wasted taxpayer revenues supporting union cronyism. There is no excuse for that, but Davis Bacon was first made mandatory in 1931, signed into law by Herbert Hoover, so we have had 81 years of labor monopoly waste.

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Now look at a few more categories of the DBA … Here is Ironworker.

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a. Employees will be paid $.50 per hour more while working in tunnels and coffer dams; $1.00 per hour more when required to work under or are covered with water (submerged) and when they are required to work on the summit of Mauna Kea, Mauna Loa or Haleakala.

I included the “special conditions”. You can see that the “fringe rate” is almost the same as the “wage rate”; only $5.71 separates them. Granted ironworkers do dangerous work at times, but at $61.76 per hour total that is close to $126,000USD per year.

Here are rates for IBEW electricians here in Hawaii …

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This is how nutty things are at the DBA. Here we see helicopter pilots getting paid less than an IBEW electrician. An IBEW electrician only needs a high school diploma or GED plus six months “paid” apprentice school while they work. I do not know what helicopter pilot school costs or how long it takes but it must require some math and navigation proficiency above a high school level. Not to mention the “danger” factor as flying helicopters is much more dangerous than pulling #12 THHN wires in ½” EMT conduit and hanging panels! I take it the “Helicopter Union” is not as strong as IBEW.

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Contrast all of the above to an “Elevator Mechanic” …

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a. VACATION: Employer contributes 8% of basic hourly rate for 5 years service and 6% of basic hourly rate for 6 months to 5 years service as vacation pay credit.

b. PAID HOLIDAYS: New Year’s Day, Memorial Day, Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day, the Friday after Thanksgiving Day and Christmas Day.

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http://www.wdol.gov/dba.aspx

Wow … POT-O-GOLD! Over $150K per year plus a lot of “vacation pay” thrown in!

Next time you see any of these guys working at airports or at schools or on highways do not feel too sorry for those poor construction dudes working in the hot sun or up on a ladder, because chances are they are living better than you are! Does anyone here think unions would embrace “austerity” any more than their European brothers are?

Contrast the average union worker with a high school diploma compared to this study from Rutgers on college graduates …

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How much debt does a union apprentice take on compared to a first year college student? The answers is “none” and add in the fact that the union apprentice is going to school part time and working full time in his or her trade getting paid quite well with excellent benefits.

From that same study done at Rutgers look at this chart that depicts the confidence level college students have in entering the labor market. Practically half say they aren’t prepared …

“The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.” – Joseph Schumpeter

None of which are government issued and none invented by Obama or Capitol Hill, despite the name!

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Was all that debt worth it? Was that degree worth it? For the housing market and auto makers it is not good news, but banks seem to be profiting from destroying yet another one of those supposed “free markets”. Good for those of you who park your cash at GNMA also. Still you can see the advantages of being able to secure a job within a union having the Congressional Seal of Approval to form a labor monopoly that feeds off the US taxpayers and the debt of future generations. Wall Street move over and let’s make that the 5% not the 1%!

What I think needs to happen is for major corporations to provide the education and training and then they get employees ready for work with no transition barriers like retraining or training or under qualifications and aptitude. Perhaps there should be a four year MicroSoft University. Bill Gates is always complaining about the poor level of education he has to pick from in the US job market. Same goes for a Ford University or a Pfizer University. This is the education model that our competitors Germany and Japan adopted.

During my “contractor career” I have worked all those IBEW classifications from “cable splicer” to “telecommunications worker” and everything in between, both in a union and non-union capacity. I decided to get out of the field and got into management and estimating with various electrical contractors in the San Francisco bay area. Even as a union manager on prison and water treatment projects I was in the field on weekends and holidays “off the books” pushing the projects forward. In that business you are only as good as your last project. There is no public praise or medals and awards for your “body of work” like politicians and movie stars get. I was content in the fact that kids were in schools I built learning the ABCs and inmates were locked up and not terrorizing the law abiding public. My company even helped Cisco Systems innovate VoIP on a prototype project at Menlo College in Silicon Valley. Looking back though it was a tough road. You are under the gun constantly to perform and threatened by school districts, prison officials, inspectors, architects, engineers and lawyers and other contractors and unions as well as the IRS and OSHA. If you do not perform then your company gets assessed “liquidated damages” to the tune of $5,000 per day not to mention penalties and interest and all sorts of fees. Confrontation and chaos is the order of the day! Not a recommended career path for the meek or bleeding hearts.

Oops … enough background info, back to the DBA stuff … Not included in all this is extra union fees that are submitted with your reports, but those fees only apply to the company and not the union worker. As a business owner you also have to take into account the peripheral costs in managing the accounting and workers that are usually company paid. Quite often in the early start-up years I found myself as the business owner getting paid substantially less than the union workers I had employed on our projects. In fact the first year I determined I would have been better off working at McDonalds than starting my own business. Luckily things turned around and I found myself making more than some CEOs of listed NASDAQ companies. Yet it was not George Bush or Bill Clinton I have to thank because those guys and their many other government agencies put more road blocks in my way than I can count. Least of which is the unfair corporate tax rates on small businesses. Just remember on all Public Works projects it is the “low bidder” who takes the risk, not the President or Congress or even taxpayers. If anything being low bidder benefits the taxpayers. My point is that without this politically blessed 81 year old labor monopoly debt and taxes in the USA would be much less than they are now. Only politicians, ordained material suppliers and union workers would object to that statement. In other words DBA benefits a monopolized minority.

What is not mentioned in all this union based DBA rates is how closed the union membership is to the general public. Try getting into the IBEW without knowing anyone or being related to another member. I tried back in the 1980s and hit a giant brick wall. They do not call it a “brotherhood” for nothing! It’s practically an exclusive blue collar club!

Can we be honest here? I mean “civil rights” and “equal opportunity” is out the window when it comes to high paying union jobs in the USA. Add in if you are a skilled “non-union” worker trying to get into the union then you are at best a traitor and rated no higher than pond scum! It would make no difference if your skill levels were much higher than most union workers.
Unless you have worked many years in the Public Works sector and become jaded you would be horrified by what you see. It is corrupt on many levels and I have not even touched on what tactics unions and union shops use to bust non-union companies. Yes, literally that would include such Third World tactics like “threats and bribes”. Public Works from the top down, meaning from project planning down to labor and materials is a cesspool of corrupt practices. White collar and blue collar corruption abounds. I have been out of that realm for some ten years now and I keep scanning the news reports looking for scandals that may change things around in Public Works but I have yet to see anything that indicates the status quo is unacceptable, which means there is no chance for any changes on the horizon. I think mostly because it is a hidden world. At best maybe 99.9% of all the taxpayers only drive by these work sites very briefly and have no inkling of what really goes on. Add up the inflated costs of monopoly labor rates for the past 81 years and it is no small wonder the US Treasury has nearly $16TRIL in debt. The cost of labor is the highest cost to infrastructure and construction on government financed projects. Is it a coincidence that unions and union workers mainly support politicians who are pro-labor, meaning “labor monopoly”? Politics is pervasive and rotten to the core! As economic and monetary conditions worsen corruption worsens as well. Every time I hear a career politician praising the “public service” of another career politician it is nauseating! Really? Public service? What is that … really? Thanks for the $16TRIL in debt and my annual tax bill! Oh, and by the way I am looking forward to my measly Social Security check, the frozen COLA and EBT! Many Americans will be forced to enjoy cat food and dumpster diving in their twilight years! You definitely do not get the same “purchasing power” for Social Security and Medicare as you paid in.

“We don’t have a system that is working. We have one that basically moves cash around and we can guarantee cash benefits as far out and whatever size you like, but we cannot guarantee their purchasing power.” – Alan Greenspan, US Congress Social Security and Medicare testimony 2005

I would be laughing at that statement if it were not so damn honest and to the point! Greenspan said it right in front of Congress in 2005 so no politician can claim ignorance or missing facts. That was seven years ago, so what is the solution Congress proposes? What freeze COLA? ObamaCare? Whatever the solution is it will more than likely punish the “savers” and taxpayers and reward the bankers and the corporate welfare industrial complex. The perfect debt storm is on the horizon. Without more debt America is Greece.

WRAPOLA

I just read somewhere that there are only 100 days left until the US Presidential election in November. That article was a fundraising blog ad for Obama asking that his supporters give at least $5 or whatever they can afford. I wonder if those Obama supporters will ever meet those other Obama supporters who paid $40,000 per plate to hear him speak to the Hedge Fund elites in NYC. You think? Also do you think Obama tells the $40,000 a plate supporter the same thing he tells his $5 supporter?

I filed this in my “Unreal” box …

“I don’t think ultimately that the Europeans will let the Euro unravel, but they are going to have to take some decisive steps,” Obama told a $40,000 per-plate fundraiser at the NoMad hotel in New York City. “And I am spending an enormous amount of time, trying to work with them. The sooner that they take some decisive action, the better off we are going to be.” Obama, Speaking at a Hedge Fund Conference in NYC

Okay, what do you get on that $40,000 plate? Do you get any “food”? If so, what kind is it? Maybe gold plated hot dogs? Diamond studded pizza? And so it will be … Nothing makes things “more better” than “decisive action” says our incumbent President running for another term! Okay, as opposed to last year’s US Debt Circus that cost America its perfect credit rating at the S&P! The iceberg is dead ahead Captain! The debt ceiling will need to be raised again soon here in America. Show us “decisive” mi Capitan!

Central planners want a One World government and a One World currency. They will bring on any emergency they deem necessary to attain that goal. I do not think they will succeed against Human Action. Still we all need to resort to “resilient community” to weather the oncoming debt storms.

TO THE LARGESS OF CAPITALISM – The word “capitalism” today has been misappropriated and redirected for the purpose of conveying certain political beliefs on greed, but what is it? What is “capitalism”? Simply put “capital-ism” is the condition of having capital. A system based on individual rights is the best econ-political system to accelerate the production of capital. The best exchange of ideas and therefore goods and services has been the “market economy”. Without individual free rights you cannot have capitalism, since capitalism is a social system based on the principal of individual rights. To be “anti-capitalist” is to be against the freedom of individual rights, which are the basis of the Declaration of Independence and the essence of the US Constitution. In a truly free market capitalist system the questions is not “how do I make money from this person” but, “how do I create a product that this person will perceive as improving their life”? The few true modern capitalist innovators like Bill Gates and Steve Jobs did NOT approach their life’s work trying to fleece the guy next to them in the name of narcissism and greed, but they wanted to create a product that would revolutionize society and make life better for every person on Earth. They did that … On the other hand, how has the CEO of Goldman Sachs improved society? What product of theirs do you use every day that benefits your life? Those types of CEOs are “anti-capitalist” and when they use political influence and monopolistic tactics to achieve their goals they defraud society. They achieve their “state of capital” by unlawful and unethical means. There is no “kindness” there and that is what must be separated.

“Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me.” – Steve Jobs

On the other side of that coin is “anti-capitalist” Communism. I would like to finish up here with a few paragraphs from a book by George Kennan, who was a US Ambassador to Russia during the Cold War and a two time Pulitzer Prize winner. This is from “Sketches from a Life”; from his diaries of Russia in the 1950s

Yesterday was a rainy Sunday. I walked down to the post-office in the morning and ran into a huge Communist demonstration–thousands and thousands of people standing in the drizzling rain before the Dammtor Station, with their red flags and arm-bands, listening to soap-box orators, singing the Internationale, marching around behind sickly fife and drum organizations, buying propaganda literature and Sacco-Vanzetti post-cards.

I stood around and watched, listened to snatches from the speeches, looked at the people themselves. And the strange thing was that for all my contempt for the falseness and hatefulness and demagoguery of communism, I had a strange desire to cry when I first saw those ranks of people marching along the street–ill-dressed, slouching, brutalized people.

It was the first time in my life that I have ever caught a hint of the real truth upon which the little group of spiteful parasites in Moscow feeds, of the truth that these ignorant, unpleasant people were after all human beings; that they were, after centuries of mute despair, for the first time attempting to express and to assert themselves; that under the manifold hokus-pokus of the red flags and the revolutionary ritual they had found something they considered to be essentially their own, something that they believed in, and were proud of; that tomorrow, just as yesterday, these same people would again be mutely absorbed in the work of the world, with barges, railways, drays, factories, street-cars, and what not, while other people–the industrialists and journalists and politicians–gathered the fruits of their labors and held the center of the stage; but that today was their day, and they were marching under their banner, sullied and cheapened as that banner might be; that they were marching sullenly and defiantly, but with hope and a tremendous earnestness.

Here, it seemed to me, was certainly error and hatefulness and pathos; but here, also, was seriousness and idealism. And after all, in the present state of the world, I am inclined to regard any sort of idealism, be it ever so beclouded with bitterness and hate and bad leadership, as a refreshing phenomenon. END

How did we ever think the Russian people hated the American people? Also, how did we ever think the American people hated the Russian people? Hardly any of us ever met each other and 99.9% of the time when we did we actually liked each other! What happens is just a few elected dictators hated a few unelected dictators and visa versa. If politicians had to fight their own wars there wouldn’t be any!

It is interesting to note what George Kennan saw in the early 1950s Russia is something we are in the midst of with such demonstrations like the Tea Party Movement and then Occupy Wall Street. Yes, where is the “idealism” in America or is the majority so complacent as to languish on our sofas? I read recently that Clint Eastwood claims he is going to vote for Mitt Romney and it caused a heated condemnation from the Huffington Post groupies. And so it would … Yet what we fail to see is that under this corrupt monetary system firmly embedded in the Theory of Debt we are all the 100%. There is no 99 or 1 … its 100! This is because the US Treasury dispenses “eternal debt” to each and every one of us whether we vote for Obama or Mitt; whether we are Republican or Democrat and whether we are old or young-black or white. So, I want to know where the idealism of Freedom is. Where is the Pursuit of Happiness and Liberty? Or are we so embedded in the grandiosity of government largess that we have capitulated to compliance? Idealism can never be nurtured in any form of monopoly, be it political or monetary. Okay Clint! Go ahead and vote for MITT … Do you feel lucky PUNK? Do ya?

1854.png

“The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along, paying heavy taxes for which they get nothing in return.” – Gore Vidal, The Last Empire, died July 31, 2012

“If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.” – James Madison

“It is clear our nation is reliant upon big foreign oil. More and more of our imports come from overseas.” – George W Bush

“I believe that in every country the people themselves are more peaceably and liberally inclined than their governments.” – FDR

“It was my worst nightmare coming true. Nobody really knew what was going on in the market. The toxic assets of many of our biggest banks are over-the-counter derivatives and caused the economic downturn that made us lose our savings, lose our jobs, lose our homes. It was very frightening.” – Brooksley Bourne; CFTC Chairperson 1996-1999, PBS Frontline The Warning

“Marxism is essentially a product of the bourgeois mind.” – Joseph Schumpeter


Deron’s Daily ETF Analysis

The iShares MSCI Mexico Investable Market ETF (EWW) has shown excellent relative strength since gapping up in June of this year. During this time it has been consolidating along its 20-day EMA, as it has set a sequence of higher-lows. EWW offers a potential buy entry on a pullback and undercut of its 10-day or 20-day moving average. As always, we will be watching for the formation of a reversal candle as the pivot for a potential buy entry.

open position summary

The commentary above is an excerpt from The Wagner Daily newsletter, which we have been publishing since 2002. Subscribers to the full version receive our exact entry and exit prices for swing trades of the top ETF and stock picks, access to our market timing model, and more. To get started today, sign up for your 30-day risk-free trial to our Wagner Daily stock newsletter or visit our trading blog to learn more about our proven technical trading strategy.


OptionOracle


Harp’s Roadmap


Cara on the Metalminers


Cara on the International Markets


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


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  1. 7:45 AM ET ICSC-Goldman Store Sales 8:55 AM ET... [#111734]
    By: davefairtex (5216 comments) Go to top ↑
    • 7:45 AM ET ICSC-Goldman Store Sales
    • 8:55 AM ET Redbook
    • 11:30 AM ET 4-Week Bill Auction
    • 1:00 PM ET 3-Yr Note Auction
    • 3:00 PM ET Consumer Credit
  2. 3 in Buy alert 2 in Distribution Zone 9 in Sell... [#111735]
    By: davefairtex (5216 comments) Go to top ↑
    • 3 in Buy alert
    • 2 in Distribution Zone
    • 9 in Sell alert

    Accumulation Zone (4%): Monthly 8, Weekly 4, Daily 2
    Distribution Zone (18%): Monthly 14, Weekly 17, Daily 24

  3. Italy 2Q Gross Domestic Product (YoY) decreases 2.5% and... [#111737]
    By: Les (7233 comments) Go to top ↑

    Italy 2Q Gross Domestic Product (YoY) decreases 2.5% and (QoQ) falls 0.7%

    UK industrial and manufacturing output continues to look sick as well:

    UK Jun Industrial Production (YoY) decreases 4.3% and (MoM) falls 2.5%

    UK annual Manufacturing Production slid 4.3% in June, following a 1.8% drop in May and above forecasts of a 5.6% decline. On a monthly basis it decreased 2.9% in June, after registering a 1.2% rise the previous month and above projections of a 4.1% fall.

    http://www.fx360.com/calendar/

  4. ALOHA!! Thanks Bill and Geoff or whoever pointed out... [#111738]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    Thanks Bill and Geoff or whoever pointed out STANDARD CHARTER BANK and the many regulatory dilemmas these global banks face on top of their rogue traders and their pending and current legal quagmires. LIBOR is going to be the fuse in more exploding legal fees.

    FYI-Standard Charter is a major resource bank and they make loans in the resource stocks, meaning gold companies. They are very busy in Ghana, West Africa and all over Africa and Asia. From that article I deduce they are busy in the Middle East also! I would venture to guess you cannot find a major bank on planet Earth who has no links to moneylaudering tactics and/or terrorists. Of course you have to define the word “terrorists”, because in Iran the USA is a terrorist nation! I guess it all depends on who is being killed by who’s bombs …

    Well … off we go to austerity!

  5. Submitted by kaimu (2728 comments) on Tue, 08/07/2012 ... [#111739]
    By: kaimu (3289 comments) Go to top ↑

    Submitted by kaimu (2728 comments) on Tue, 08/07/2012 – 09:11 #111736 (in reply to #111732 08/06/2012)

    ALOHA!!

    Venti-We have seen an actual scenario of the oncoming “American Austerity” in Europe the past 18 months plus as the debt issues intensify and the CDS dance all around the D WORD, which is “default”, in sovereign debt terms.

    Some historical perspective:
    -In December 2008 the EU handed out a $200BIL Euro stimulus to boost growth after the Global Financial Crisis(GFC)

    -In April 2009 the EU forces France, Spain, Ireland and Greece to reduce their budget deficits.

    I would consider April 2009 as the red flag day of the entire EU debt crisis and the beginning of the Euro troubles. Back then the POG was $860US. Later in 2009 the POG breached the $1200USD price level and then settled back down to the $1100USD price level at the end of the year.

    - In December 2009 Greece admits its debt had reached $300BIL Euros the largest ever in history.

    -In Jan 2010 it is learned that Greece accounting procedures under reported budget deficits by 9%, meaning it revised its deficit past the EU 3% limit to 12%.

    -In April 2010 Greece revised its deficit up another 1%+ over 13%. POG $1150USD.

    -In May the EU hands Greece its first bailout. POG $1170USD.

    -In November 2010 EU bails out Ireland. POG $1350USD.

    By far the most damaging year for the EU and Euro was 2011 as more and more debt events triggered market moves and signaled real possibilities of default.

    -In Feb 2011 EU sets up permanent bailout fund ESM with $500BIL Euro. POG $1320USD.

    -In May 2011 $78BIL Portugal bailout.

    -In July 2011 second Greece bailout of $109BIL Euros. POG $1500USD.

    -In October 2011 Bank of England does a $75BIL UK stimulus into the economy. POG $1650USD.

    -In December 2011 EU tries to pass new budgetary rules but fails. POG $1600USD.

    -In Jan 2012 S&P downgrades France and the new EU bailout fund EFSF. POG $1625USD.

    -In Feb 2012 Greece passes “Austerity Bill” to get debt write-offs. POG $1750USD.

    -In March 2012 IMF and EU hand Greece second bailout of $130BIL Euro. POG $1780USD.

    -In May 2012 Spain 4th largest major bank Bankia asks for bailout of $19BIL Euros. POG $1600USD.

    -In June 2012 Spain asks for $10)BIL Euros to shore up failing banks.

    -In June 2012 UK exchequer Gordon Brown warns that Spain and Italy may need bailouts. POG $1625USD.

    -In June Greeks elect a pro-austerity party and fears of Greece leaving the Euro are dissipated. POG $1580USD.

    Today August 7 as I type POG is $1616USD.

    So much huge uncertainty with the EU and the Euro starting way back on the first red flag in April 2009 with the first EU $200BIL stimulus, but what has not been uncertain has been the POG price rise since then based on these hugely deflation related events surrounding “austerity”. You will notice though that the EU and ECB never let the money supply deflate as they pumped $100 or BIL of Euros into the failing banks and sovereign debt of Greece, Portugal, Ireland and now it looks as if its Spain and Italy. Exactly what sort of “austerity” is it when public spending is reprimanded and reduced but government and banks get these capital injections that essentially nullify the austerity measures the voters agreed to.

    Will US Voters ever accept “austerity”? Will US unions like AFLCIO, UAW and IBEW ever agree to austerity? Now we begin the process in America of facing “austerity” in the form of “sequester”. My guess is Jan 2013 is too close and this “official vote to adopt sequester” will be put off a few months, maybe a quarter. So right off the bat we will see sign that the US Congress and whoever is President will want to postpone the “reckoning”.

    The broader context is we have a monetary and political system based on monopolistic tactics whose only hope to survive is propping up their money system based on debt. Their mantra is “More debt is needed to resolve the debt crises”. You are guaranteed that the US Congress will always meddle and never leave the fate of their power to the American citizens, especially the ones that vote! Problem is while all this “can kicking” is going on the Debt Ceiling debate will happen. My guess is Congress will vote another “small sum” like $400BIL USD increase to keep things going while they decide the “sequester” issue.

    As you can see all through the EU DEBT CRISIS gold has performed well. There have been some major down days but obviously there were some major up days also. We are still above $1600USD even with the debt trauma of Spain, Italy and France looming. We are also noticing that Germany is seeing some cracks in their debt dam.

    In terms of SLR performance during this EU Debt Crisis at the first red flag in April 2009 when GLD was at $84 and SLR was at $0.37A. Today GLD is at $156USD and SLR closed yesterday in Oz at $2.60A. GLD gained 185% in that time period and SLR gained 700%. Yet you must go on a case-by-case basis because the market machinations of price discovery in a corporation is different than the market machinations of a monetary system and exploding debt events enhanced by corrupt bank and political tactics. What gives the POG its boost is the massive uncertainty and by not so odd coincidence that same uncertainty about politics and debt also causes small business and big business to hesitate to hire or take on CAPEX. That uncertainty will continue and in fact be super enhanced by time 2013 rolls around and uncertainty is a component of the C WORD.

    • Its a nice summary Kaimu. And if we judge by the 2010... [#111740]
      By: davefairtex (5216 comments) Go to top ↑

      Its a nice summary Kaimu. And if we judge by the 2010 budget “compromise” (where taxes were lowered, AND spending was increased – at the expense of yet more debt) national austerity in the US won’t happen under the current cultural mind set. Austerity will most likely happen for individuals, but won’t apply to the central state.

      More taxes, more debt, and more spending will be the answer.

      I have been reflecting on uncertainty lately, and how it must be affecting both businesses and consumers in europe. In some sense, its a self-fulfilling prophecy. Uncertainty about eurozone debt and the eternal can-kicking (which keeps that uncertainty going) will effectively drag out this crisis for years and years, making sure to keep the people and businessmen in a state of general paralysis, constantly watching over their shoulders for the next government intervention. Its not surprising that GDP has tumbled in europe too.

      Consumer spending is about confidence; so are sovereign interest rates. Lower consumer spending lowers GDP, which lowers ability of the state to repay massive debt, dropping confidence on sovereign bonds, raising rates, lowering further the ability of the state to repay debt. And that affects consumer confidence. Nice cycle – all enabled by massive debt. In fact, “austerity” might not be to blame for this situation at all. This might all just be about confidence, driven down by eternal can-kicking, extraordinary interventions, massive debts, and continuing uncertainty.

      Perhaps tiny Iceland showed us the way; perhaps ripping off the band-aid, taking a few years of bitter medicine brings with it a sense that the root cause of the problems have actually been addressed, not just papered over one more time.

      Its a pity we won’t try that. Some bankers and some politicians might lose their jobs, and we can’t have that…

      • kaimu, dave, meanwhile have a look what our fate-deciders... [#111741]
        By: Vadym Graifer (4341 comments) Go to top ↑

        kaimu, dave,

        meanwhile have a look what our fate-deciders are thinking (and when you read the quote below, tell me, can the individual with this level of IQ even have driving license, let alone run country finances):

        (US) Fed Rosengren (voting alternate, dove): Reiterates wants substantial open ended QE tied to economic outcomes – CNBC interview

        - “open ended” QE means a bond buying program which should focus on MBS, and set a monthly purchasing size of “substantial magnitude.”
        - Notes that QE pushes up asset prices and helps housing market.
        - Housing market has been improving and has “some legs,” partly due to what the Fed has done to date.

        • So...we should print money until the housing market... [#111742]
          By: davefairtex (5216 comments) Go to top ↑

          So…we should print money until the housing market recovers? That foolish housing market, it is mis-pricing housing, and the Fed knows better, doesn’t it? And it doesn’t mind stealing money from savers to get the job done.

          Reminds me of what the interventionists (Draghi? Monti?) in europe are saying: the sovereign bond market is stupidly mis-pricing risk in the PIGS countries, and central bank bond-buying is required to correct the bond market’s mistakes. That approach sure solved the Greek problem, I have every confidence it will iron out the Spanish 25% unemployment issue, banking crisis, and property bubble in no time flat.

          I’m not saying the market is always correct all the time – it can be wrong for quite a while – but I think it has a better record than the idiots who thought the mortgage default issues were limited to subprime. And it certainly freely admits when it is wrong. Perhaps that’s why they’re called “corrections.” :)

          It really is a struggle between central planning and market action. I thought we settled that whole debate in 1989. I guess it has become necessary to destroy the town in order to save it.

          • "I thought we settled that whole debate in 1989." You know... [#111747]
            By: Vadym Graifer (4341 comments) Go to top ↑

            “I thought we settled that whole debate in 1989.”

            You know what is seriously scary? I though the same about many issues, not just central planning vs. market. Yet I see time and again that those same issues arise once again, at all levels and angles. It’s as if no one knows history at all, and we are not talking about ancient Rome. Campus professors enlighten everyone willing to listen about virtues of central planning and government regulating morale with no slightest clue that their ramblings could have been lifted from the pages of Pravda of 1970. Art elites call for “compassion-based society” and bash capitalism not in the least suspecting that they quote Soviet rhetorics to the word. OWS banners and speeches are copy of those of Bolshevik’s commissars of 1917. President’s speeches could have been put in mouth of a member of Politburo and no one would have suspected anything.

            On a few occasions I found myself in a dialog with some of these types and every time was stunned to discover that the problem is not that they haven’t weighed all sides and made up their mind. Nothing of sorts. They simply had no idea that their way has been tried and failed miserably. They draw blank when asked whether they know that there was a country that tried it for 70 years and failed miserably. When USSR is named, they start babbling something incoherent about “they did it wrong way,” not being able to formulate what was wrong in Soviet implementation and how theirs would be different. Talk about “those who don’t learn from history…”

            It became almost a commonplace among ex-USSR immigrants to comment on “haven’t we seen it all already and don’t we know how it ends.”

            Whatever. Back to trading.

        • ALOHA!! Reiterates wants substantial open ended QE tied to... [#111746]
          By: kaimu (3289 comments) Go to top ↑

          ALOHA!!

          Reiterates wants substantial open ended QE tied to economic outcomes – CNBC interview …

          To me that is another signal of impending debt event and bank crisis ahead when Fed Govs ask for unlimited toxic asset buyouts! What kind of an asset is an asset and still toxic?

          The US Treasury has had open ended QE since 1971! It works … NOT!!

    • Thanks for that. There's a lot of food for thought there... [#111766]
      By: Ventilation Blues (164 comments) Go to top ↑

      Thanks for that. There’s a lot of food for thought there. The timing of this event and the effect on the US financial system, be it ignited from public outrage, media exposure, statistics or the “official vote to adopt sequester” is an interesting question. Jan 2013 or later? As with the changes in the middle east, many saw it coming but everyone was waiting for that one event to spark change. It just happened to be an Egyptian fruit/bread seller. I wonder what will ignite this change in the current monetory and political system, the public, policy or more fruit and bread?

  6. There is an opinion piece in the New York TImes by Gary... [#111743]
    By: Menock (39 comments) Go to top ↑

    There is an opinion piece in the New York TImes by Gary Gensler, our esteemed head of the CFTC called Libor, Naked and Exposed. I barely skimmed it but I couldn’t read it since I have no faith in the honesty of the exGoldmanite. If you gave Voldemort a prosthetic nose, he and Gensler would be indistinguishable. Character shows.

    • ALOHA!! Gary Gensler was a major opponent to derivatives... [#111744]
      By: kaimu (3289 comments) Go to top ↑

      ALOHA!!

      Gary Gensler was a major opponent to derivatives regulation along with Alan Greenspan, Rubin and Summers back in 1998 against Brooksley Born who was head of the CFTC in 1998! Since then only Alan Greenspan has admitted he was wrong. Why do we need these 100 time losers preaching to us? Why do these guys still have jobs? Why is it they are still allowed to walk the streets freely? Do they sleep at night? Do they have any shame knowing they have been wrong all along? Is there a class for that at Harvard?

      • Why do these guys still have jobs? No accountability for... [#111748]
        By: davefairtex (5216 comments) Go to top ↑

        Why do these guys still have jobs?

        No accountability for those at the top. The people who didn’t see the problem coming, or who actually contributed to the problem are still in charge. So as a result our national policy continues to be can-kicking rather than problem solving. It makes complete sense.

        Reflecting on it, I am astonished that Bernanke, the man who watched the bubble blow and yet stood by and did nothing, is still in charge at the Fed. Any Admiral who lost a battle of that magnitude would be on the beach at half-pay immediately afterwards. Admiral Kimmel, Commander at Pearl Harbor, was reduced in rank two grades and retired a year after the attack. Bernanke, of course, still remains in charge. Perhaps abject failure is what we’re seeking to reward.

        I’m guessing there’s a deeper game afoot, but I should really stop thinking about this. It just gets me upset.

    • Menock, Voldemort grew a prosthetic nose and is now... [#111776]
      By: kp84 (43 comments) Go to top ↑

      Menock,

      Voldemort grew a prosthetic nose and is now governor of Florida. ;^)

  7. As we've all lived through financial crisis after crisis... [#111750]
    By: Ron Sen (975 comments) Go to top ↑

    As we’ve all lived through financial crisis after crisis, with no real reform, I think we’re forced to conclude that no Cleavon Little is ever coming to Rock Ridge to clean up the town…

  8. ... [#111751]
    By: Jack Senett (438 comments) Go to top ↑

    Above.

  9. Interesting review at FT Alphaville considering a role for... [#111752]
    By: Juniorgoldminerseeker (228 comments) Go to top ↑

    Interesting review at FT Alphaville considering a role for gold rather than treasuries in the next round of QE, akin to the 1930′s gold revaluation, we are at about the same timing point. Izabella Kaminska is certainly no goldbug but has written extensively about the problems caused by the shortage of safe assets, exacerbated by QE.

    It seems early to me for an official recognition and revaluation of gold but maybe there will be stages. The pending decision by the BIS to class gold as a tier 1 bank asset have been noted in both the gold press and FT Alphaville as potentially very significant.

    http://ftalphaville.ft.com/blog/2012/08/07/1109781

    It does feel that a straight forward repeat QE could be too politically difficult.

    New “tools” could perhaps be used with less political backlash, or at least less public recognition of their purpose.

    As discussed in earlier posts here today “Open ended QE”, or GDP targetting may sound innocuous but may well have more dramatic effect than a formal declaration of $x bn treasury purchases. A number point to MBS purchases. Alternatively stopping paying interest on excess reserves is one suggestion by Michael Pento here. In the UK the Bank of England is cutting reserve requirements for banks and funding the banks with cheaper money. Time will tell whether it is all pushing on a string unless there are active asset purchases from private to public balance sheets.

    http://kingworldnews.com/kingworldnews/KWN_DailyWe

    Ambrose Evans Pritchard has been interpreting moves in both China and Europe preparing for easing.

    http://www.telegraph.co.uk/finance/comment/ambrose

    http://www.telegraph.co.uk/finance/comment/9453667

    I take Vad and Dave’s points above, but I think controllers will keep trying to control.

    And of course if gold is a tier 1 asset I think it is worth a little more in the ground too…!

  10. FIFA is one of the most corrupt organizations in sports... [#111753]
    By: Bill Cara (4105 comments) Go to top ↑

    FIFA is one of the most corrupt organizations in sports. Now they are considering suspending Canada’s top women’s soccer players for making the same complaints about their USA game referee that have been made all around the world.

    http://slam.canoe.ca/Slam/Olympics/2012London/News

    These youngsters play their hearts out only to get robbed by what they think is a corrupt referee, and now a corrupt organization is considering suspending them?

    http://www.guardian.co.uk/football/2011/nov/21/mp-

    Is it any wonder why young people defy authorities today?

    If FIFA does suspend Christine Sinclair from participating in the Bronze medal game for her post-game remarks, they will soon be watching her carrying Canada’s flag to the closing ceremonies and acknowledging her next year as Canada’s female Athlete of the Year. Good on her.

    • i was so pissed about the refereeing. the Olympic committee... [#111758]
      By: 14them34me (295 comments) Go to top ↑

      i was so pissed about the refereeing. the Olympic committee should look into any communications (Tweet, email etc) between the ref and whoever for possibility of bribery and rigging the game! Hey, I can say whatever I @#$% please since I’m not involved with the team ….

      • 14them34me, I was attending a funeral and missed the game... [#111761]
        By: Bill Cara (4105 comments) Go to top ↑

        14them34me,

        I was attending a funeral and missed the game, but I came in within 30 seconds of the end, and saw the emotions, and later saw the reporting and replays. Awesome game that was perhaps the best ever played between women’s teams in soccer. My comment was more about how older people today have disgusted their children in so many ways. People in authority have to seriously look at their own behavior before censuring others.

        These Olympics have been a disaster that way. The Greek committee sent home a youngster who made a tasteless tweet about malaria or something. Afterward she knew it was wrong; but for that committee to send her home, her hopes and dreams dashed, after several years of dedicated practice, was uncalled for. Do I think less of the Greek athlete for a stupid joke or of the committee now? Have those committee members not ever told a tasteless joke in their lives? Was their behavior at the Games a total class act?

        In another incident, the Australian committee sent home two young swimmers for a Facebook photo from a few months ago, showing themselves as cowboys with rifles. I find this “I’ll show you who’s boss” behavior by persons in authority to be unacceptable.

        • Bill, the word 'corruption' just doesn't fully encompass... [#111767]
          By: Ynot (236 comments) Go to top ↑

          Bill, the word ‘corruption’ just doesn’t fully encompass the amoral, high-handed and avarice inflicted culture of the people in power within that organization. (Sort of reminds me of Paulsonian HB&B groups and their ilk…)

  11. What a mess. I have friends who refuse to sell or even... [#111754]
    By: NYUGrad (4750 comments) Go to top ↑

    What a mess. I have friends who refuse to sell or even think about a price level to sell. both on the downside and upside! amazing. When do they expect to ever get a their money back?

    investors becoming married to a bad situation. No one forced anyone to buy but this goes to show how ill equipped the majority are vs the selling machine that is wall st.

    • While its sad to see the public fleeced by the FB debacle ... [#111755]
      By: Ventilation Blues (164 comments) Go to top ↑

      While its sad to see the public fleeced by the FB debacle , I also frequently refer to the MUX one. Having said that, over the summer months (“away in may back in September? .. I forget the phrase …) MUX has been quietly clawing back some of its losses. After hours seems to indicate another 10% pop on the horizon. If things go on like this I might be able to sell next week and only suffer a 40% loss!!!!. Heads up FB owners , all is not lost.

  12. ... Dr... [#111756]
    By: baz22 (2875 comments) Go to top ↑

    … Dr. Rosengrenhttp://www.rantfinance.com/2012/08/07/drs-bernanke-and-rosengren-meet-dr-frankenstein/ …. comments on ‘ reaching proper inflation target ‘.. over the last 17 years, the Fed has learned nothing.

  13. i wonder if anyone here has any insight on SLW at current... [#111759]
    By: 14them34me (295 comments) Go to top ↑

    i wonder if anyone here has any insight on SLW at current price ?

    • 14them34me, In the section above on broker research, I... [#111760]
      By: Bill Cara (4105 comments) Go to top ↑

      14them34me,

      In the section above on broker research, I attached the Raymond James report on Silver Wheaton, which is a Cara 100 company.

      • thanx Bill. I often miss the reports above as I stay at the... [#111762]
        By: 14them34me (295 comments) Go to top ↑

        thanx Bill. I often miss the reports above as I stay at the bottom for fresh blog during the day.

  14. http://www.youtube.com/watch?v=T0jpso4jDC4 Interesting to... [#111763]
    By: Les (7233 comments) Go to top ↑

    http://www.youtube.com/watch?v=T0jpso4jDC4

    Interesting to hear from Jesse that the BNN won’t even mention this subject, let alone invite anyone for discussion.

    I agree with Jesse on the subject of the growing global currency war – and that the pieces are moving as we speak with few in the public for the wiser.

    Switzerland, a pissant little economy but holding a strategic role in ‘risk off’ is now the 6th largest currency manipulator in the world in terms of foreign FX reserves. I’d like to see the SNB sterilizing those reserves and accumulating gold. No sign of this yet.

    I find the idea ridiculous that Sweden will likely pursue monetary policy with Switzerland in mind moving forward as the Swedish Krona strengthens on the back of SNB diversification efforts. Sooner or later the club of CB’s is gonna turn around and stomp on the SNB’s head.

    Yet as Jesse remarks, the Western media establishment don’t wanna talk about it. I wonder where metal prices will be when the media finally do open up, and the public catch on?

    LIBOR, CDS’, interest rates. We know the fish is rotten. Why not equities and commodities too?

  15. I noted Bill's comments on WMT this weekend and like the... [#111764]
    By: Les (7233 comments) Go to top ↑

    I noted Bill’s comments on WMT this weekend and like the thesis of buying this global behemoth on any market dump back to the 40′s. It was interesting to note one fund manager comment to Lauren Lyster that some WMT stores are 40% food stamp revenue. Sounds like WMT is a leveraged long on government subsidies. Its US revenue anyway…

    WMT charts are starting to look like its get out time. Daily illustrates another test of the 20MA while the weekly trend line support – that frequently characterises the intraday IWM action – looks like it will be broken. Fewer and fewer investors chasing a small bag of big cap investments? And the overall market implications are?… wait and see of course, and play accordingly See attached.

    http://www.youtube.com/watch?v=FlXHXalclPM&list=UU