Bill Cara’s Blog for Jun 15, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning, Geoff here.

I believe that risks are too high to place major trades on Fridays, especially when market changing geopolitical events have a good chance of occurring over the weekend.

I have also been discussing being patient and waiting for confirmation of market trends.

At this time, I would be lining up both buy and sell candidates with the goal of placing those trades based on confirming price action.

With that said, here are some charts to ponder:




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 1,922.33 6:44AM EDT Up 34.24 (1.81%) Components, Chart, More
^BFX BEL-20 2,118.00 6:51AM EDT Up 51.00 (2.47%) Components, Chart, More
^FCHI CAC 40 3,087.95 7:00AM EDT Up 55.50 (1.83%) Components, Chart, More
^GDAXI DAX 6,204.57 6:45AM EDT Up 65.96 (1.07%) Components, Chart, More
^AEX AEX General Chart, More
^OSEAX OSE All Share 441.80 6:45AM EDT Up 7.74 (1.78%) Components, Chart, More
^OMXSPI Stockholm General 304.95 6:43AM EDT Up 2.25 (0.74%) Components, Chart, More
^SSMI Swiss Market 5,920.65 6:45AM EDT Up 12.14 (0.21%) Components, Chart, More
^FTSE FTSE 100 5,495.23 6:45AM EDT Up 28.18 (0.52%) Components, Chart, More
FPXAA.PR PX Index 883.50 6:59AM EDT Up 7.60 (0.87%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,354.73 6:45AM EDT Up 6.53 (0.48%) Chart, More
GD.AT Athex Composite Share Price Index 547.34 6:45AM EDT Down 2.76 (0.50%) Chart, More

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

Enjoy your day.

Vad’s Catch of the Day

Kaimu’s Sound Money

Stephen Wellman


Never mind market volatility maybe we can start a new ETF to track US Treasury debt volatility! I offer a new acronym for this new ETF called the “DIX”(DEBT VIX)! It looks as if things are getting dicey on the debt side of things at the US Treasury these days, especially at the “net debt” line item I refer to quite frequently. Here is a snapshot of the net debt line item for May 31st …


Here it is the day after on June 1st …


On May 31st up $54BIL USD and the next day down $46BIL … The difference between the two is on May 31st there was a real “marketable” debt issuance of some $230BIL USD but the redemptions to cover that debt fell short at only $179BIL. Remember there are two debt components at the US Treasury, marketable and non-marketable. It is like derivatives where once the fraud is exposed there is no market, but at the US Treasury they announce clearly they own “non-marketable” debt. That “non-marketable” debt is traded back and forth between government accounts, like the Trust Funds and State and Local accounts. This is stuff PIMCO has no access to, yet these are some of the largest debt accounts on record at the US Treasury. Many economists say that these debts do not count since these are debts we owe to ourselves. I always say that if these debts do not count then let’s just ZERO them all out right now and see what happens! Do not be inane; believe me these “non-marketable” debts do count. In fact the USA would be in riot lock down mode if the government decided to ZERO out all the debt they owe us. I did not pay into Social Security and Medicare for 40 years just to have everything taken out of my payroll checks add up to “zero”!

I bring this to your attention because I have never seen the US Treasury net debt line item so volatile from one day to the next. On June 1st there was no “marketable” debt traded, it was all “non-marketable”. Once again we get these “non-marketable” debts wagging the dog. It was the Government Account Series that was doing the “wagging” on June 1st. It seems “non-marketable” has become virtually “marketable”.

Speaking of “zero” …


I find this totally absurd … First off the City of Buffalo has not taught JP Morgan a lesson in anything and second what sort of a drunken sailor thinks a 0.30% interest rate is “higher-yielding”? The City of Buffalo surely must realize that a 0.30% yield when even 2% official inflation is factored in is a negative return.

Buffalo City Comptroller Mark J.F. Schroeder announced on Thursday that the city would be pulling $45 million in funds from an account with JPMorgan Chase, following concerns raised by members of the Occupy Buffalo movement. reported that the Buffalo Sewer Authority funds will be deposited into a higher-yielding account with the local bank First Niagara. The new account will earn 0.30 percent interest. The account with JPMorgan had a 0.25 percent interest rate.

“Not only will the funds earn more interest with First Niagara, a major local employer headquartered in Buffalo, but it also sends a crystal clear message to JPMorgan Chase that the City of Buffalo is not happy with their business practices,” Schroeder said in a statement.

Now more “zero” …


On Zero Hedge we were treated to this lovely chart …


This is what Tyler said …

But how many have seen this chart showing global sovereign debt as a percentage of total government revenues? Is there now any doubt after seeing this why the proverbial four horseman are really just one giant black swan, only not one of failed bond auctions or something quite as dramatic, but something as simple and mundane as the smallest uptick higher in rates which would blow up the entire global financial farce, starting with the most imbalanced domino of all – the land of the rising sun?… And that at least Greece is not Japan?

As you can see by the chart the date is 2010. I have to ask if this chart is based on “net tax revenues” or “gross”. Let me do the official up to date calcs according to the US Treasury numbers on this using “net tax revenues” and I will show you how much worse the USA is than even Greece.

These numbers are from May 22, 2011 US Treasury Daily Statement …


Total NET (not gross) tax revenue is $1.063TRIL USD for May 22nd, so here is the formula …

$15.679TRIL/$1.063TRIL = 1,470%

So as you can see debt exceeds revenues by nearly 1,500% if you only use net tax revenues as a basis for revenue. It seems though that the US Treasury has other sources of revenues like TARP and GSE MBS “investments” and military sales. Let’s give them the benefit of the doubt and just go with this number which is total deposits for May 22nd …


Okay now we will back out any sort of debt issuance since debt is not “revenues”. If you think debt is revenue just because the US Treasury lists it on the asset side with other revenues then why don’t you start reporting your car loan, mortgage loan and credit card balances on your 1040 AGI for 2012! If I back out the debt line item it is this for May 22nd …


That leaves me with $2.014TRIL. Back out the tax refund numbers though …


Then we get $1.765TRIL USD. Still that ends up being nearly 900% sovereign debt/revenue, which is way more than double what the Zero Hedge chart shows for the USA. Of course back in FY2010 we had a lower US PUBLIC DEBT number, but then again that was 2010 and none of us live in 2010 anymore! So with that updated calculation we are not exactly Japan yet, but we make Greece look like … um … Greece! I do like how Australia is the lowest on that chart, even lower than Switzerland. The chart is yet another dubious debt data point at best though. Even Paul Krugman will blurt out on cue that America has lots of room left for much more debt accumulation and he chides Bernanke, his fellow raconteur, for not throwing more money at the economic disaster sooner.

Did you say “disaster”? Here … we thought Greece had a lot of unpayable loans. Look at these private banks. We were told they were paid off, yet here we see there is still a “balance due”.



The man who helped create the housing crisis in 2008, Larry Summers, Mr. Fannie Mae, suggests this to Obama when he first took office as President …


Here are more ideas from Larry on credit card debt. Capping credit card rates at 36% sure is helpful!



According to John Taylor from Stanford Economics 1 the US FED bought 77% of US Treasury debt during FY2011. I decided to investigate further and see what the maximum amount of debt the US FED has ever held, as a percentage of GDP in US history. It turns out by Table 1 below we see the year after WW2 the US FED held US Debt equal to 10.7% of GDP in 1946(see blue arrow).


By this historical comparison you would think we were deep into WW3 since debt held by the US FED as a percentage of GDP exceeds that of 1946 when America was struggling to pay for WW2. By all accounts I would say the increase in the US FED debt/GDP from 1945 to 1948 signified a deep commitment by the US FED to secure funding for the Marshall Plan, which in essence was the IOU that laid the ground work for a USD reserve currency. That agenda worked well for the USD.

By historical US FED Debt/GDP standards can the US Congress afford a WW3 since the US FED is already at World War standards now, maxed out? We are at War now, only it is a global “Debt War”! What country can really afford an all-out War now anyway? Maybe being in debt has inadvertently created a scenario for “World Peace” … NOT!


Below we see the total financial assets of the Federal Government (USA). For FY 2011 assets totaled to $1.349TRIL USD. Now look closer at those “assets” listed below in Table L.105. How many of those assets are truly “assets”? I would count “trade receivables” and “tax receivables” as an asset, but I would only count the “tax receivables” after deducting refunds so that only “net tax receivables” were counted. Without that based on past US Treasury numbers only 2/3 of that line item #13 would be an asset. I believe “deposits” would qualify (aka:OPM) as an asset lines #3 and #4, but I do not count such debt as “mortgages” (lines #6 and #9) and “consumer credit” (line #10) as an asset. I also do not count line #5 “credit market instruments” as an asset. Either one of those four line items are subject to vast counterparty default. We have discovered that “counterparty” makes all the difference in the world in terms of what is a true asset.


In order to verify what most American citizens consider a risky venture I cut this quote out of a Yahoo Finance article about how Americans have more home equity now than they had 60 years ago. Clearly Americans do not consider a mortgage as an asset and why should they since they do not own their home, they own debt.

“The willingness of homeowners to carry housing debt has been radically altered,” said DeKaser, chairman of the American Bankers Association’s Economic Advisory Council. “When the market was booming, a mortgage was used as a leveraging tool, and now it’s seen as a risk.”

Given that statement above it seems only those who purvey debt believe it to be an asset. We see some $1.349TRIL in Federal Government Financial Assets, how much in liabilities?


The answer is $12.262TRIL USD! That is quite a bit more liabilities than assets-nine times as much! What say ye S&P? Are ye ready for what be comin’ in 13, matey? Will it be just one “A” for USA?


The world is a dynamic universe of random patterns of chaotic timing. Or is it? Ludwig Von Mises called it “Planned Chaos”! Ever wonder what the world would be like now if things happened different? Maybe things are going backwards here in America. Certainly the Home of the Free and the Brave has changed in many ways. I doubt our Founding Fathers would recognize our current form of government as a Republic. They most definitely were not fond of central banks.
US FED monetary policy innovation is starting to look and feel a lot like this …


Imagine if this guy was born in the USSR and decided to go to military school instead of tinkering with electronic parts in his parent’s garage with a bunch of long haired hippie freaks …


Before Steve Jobs there was a time in America when this was perfectly acceptable, a time when the Ku Klux Klan was as wholesome as apple pie. In this 1926 photo the Klan is putting on a parade in Washington DC with a huge audience lining the streets.


It wasn’t too long ago this sort of advertising was normal stuff …


What’s legal? There was a time when illegal drugs were legal in America …


Perhaps now we need to return to the days of “Truth Dollars” …


It seems the ad claims that for every $1USD you can buy “100 words of truth”! Today I doubt if a dollar buys the letter “T’ in Truth, especially at the US FED … SUPPORT RADIO FREE US CONGRESS!!

In 1973 we had gas shortages due to OPEC supply restrictions. This was the result …


Gas prices were $0.38USD per gallon (see sign top right corner) and you even got S&H Green Stamps when you filled up! Yet even at those low prices when there’s no gas – there’s no gas! US Energy policy is exactly what now nearly 40 years later? Certainly the Middle East is not any safer now than it was in 1973.

Okay, speaking of the Middle East, the photo below was taken at a record shop in Kabul, Afghanistan in 1959. Notice anything missing in the photo? Why yes, I do, US FOREIGN POLICY intervention is missing!


If you want to see Afghanistan pre-US military and pre-USSR military in the 1950/60s go here. Both USA and USSR foreign policy, Cold War corruption, has killed off a viable future for millions upon millions of people now relegated to a debt based Third World existence. In exchange for this brilliant policy many hundreds of thousands of soldiers have died needlessly for empirical bureaucratic policy of the absurd. The strategy is destroy every country you touch with both corrupt government and warfare for decades then offer to rebuild with an IMF loan that is onerous and impossible to repay. The US Reserve Currency is an Empire of Debt sprinkled with cronyism such as the thin veneer we tout as “human rights”. Afghanistan had more democracy before the Cold War …

So why do I bother putting these photos up? I want to drive home the point that we live in a changing world where everything changes with regards to social issues and technology. This speaks to HUMAN ACTION. What we once accepted as “normal” is now radically abnormal. What we once thought would go on forever has not. At one time our leaders and people in America thought that Communism would dominate the world and we would all be subjected to the Iron Curtain. Now our largest trading partner is Red China. In the 1970s I never dreamed I would ever have to pay over $4USD for a gallon of gas, not when I was pumping it into my tank at $0.40! Gasoline costs 1,000% more now than it did in 1973. In 2006 it was abnormal for regional banks to fail every weekend. I never dreamed toothpaste would be confiscated and full body x-ray scans at airports would be routine fare. I used to think Greece was for tourists not riots. In the 1980s when I was contributing to my 401k I never dreamed PIIGS in a TARP would jeopardize my retirement. Now debt wags the dog … The common denominator in all these failing economies is “Government Gone Wild” backed by “Money Gone Wild”!

Is it not barbaric that our monetary system has not evolved past a corrupt debt based political system? Is it not barbaric that our government forces us by outdated laws and threats of violence to submit to such a corrupt and barbaric debt system whereby only those elite politicians and bankers and those “connected” to such a failed system are the only ones who benefit? Do the 1% benefit if America and our Constitutional values collapse? Who truly benefits from such chaotic consequences? Certainly it is not the future generations who benefit. Is it the present generation and past generations that benefit then? Not likely! Chaos is a C WORD also …

Maybe look at Capitalism from a different angle …

Definition of Capitalism

Capitalism is conventionally defined along economic terms such as the following:
“An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.”

This is an example of a definition by non-essentials. An essential definition of capitalism is a political definition:
“Capitalism is a social system based on the principle of individual rights.”

In order to have an economic system in which “production and distribution are privately or corporately owned”, you must have individual rights and specifically property rights. The only way to have an economic system fitting the first definition is to have a political system fitting the second definition. The first is an implication of the second. Because the second, political, definition is fundamental and the cause of the first, it is the more useful definition and is preferable.

Because people often use the term “Capitalism” loosely, “Laissez Faire Capitalism” is sometimes used to describe a true Capitalist system. But this phrase is redundant.

Capitalism is the only moral political system because it is the only system dedicated to the protection of rights, which is a requirement for human survival and flourishing. Defending individual rights is the only proper role of a government. Capitalism should be defended vigorously on a moral basis, not an economic or utilitarian basis.

Since the advent of the US FED our rights and our monetary and economic base have been steadily eroded by the use of “debt”. Sadly the US FED powers and those of Congress have only increased over time, especially during the latest credit crisis. The tragedy is that even for those of us who use no debt we are caused to suffer as well, only to a lesser degree. Debt has totally subverted our individual rights. In essence the ECB has taken every Greek citizens rights through the use of debt. If you owe debt you are owned. Debt is not the proper way to govern a country or to live as a citizen. Debt is a tool used only by oppressors not liberators. Who died and made Debt God? For me the true “evil” of money is not “gold” but “debt”. Who can say that debt does not rule the world now? All global markets and currencies go up and down now based on Greek bonds, a tiny country with only 10.7 million people. Talk about wagging the dog! Debt wags the dog.


This week I was audited by the State of Hawaii for excise tax (sales tax). It seems my out of state exemptions were suspicious so they decided to audit KAIMU NURSERY back to 2003. Luckily I still had all that paper work. I was audited for tax years 2003 to 2008. Out of all that the State got me for $235.28USD, which included penalty and interest. It probably cost the State of Hawaii about $500 for me to tie up their reps for hours and run a computer generated revenue fishing expedition. I am just a lowly farmer trying to make ends meet in a debt ridden world. Yet many employees are needed to make the State grow larger while the private sector shrinks smaller. The only tax base any government has is the private sector.

In America if you are “productive” you have a target on your back! Somehow the government has this idea that only they are entitled. Only they have the expertise to intervene into US and foreign markets. Only they have the ability to take from the private market and create debt based monetary policy out of thin air. After decades of CIA and US Congress supported US FED intervention into foreign affairs all we have to show for those efforts is a global economy on the verge of total collapse. We have ever expanding government programs and committees investigating everything from real estate to Jamie Dimon. As you saw above some of the assets listed by the US Government is “consumer credit” and “credit market instruments”. What business does the Federal Government have with private credit? Since when has the US Congress become a commercial bank backed by virtual taxpayers?

“The further a nation goes on the road toward public control of business, the more it is forced to withdraw from the international division of labor.” – Ludwig Von Mises, Nationalism, 1955

“For the bureaucrat, the world is a mere object to be manipulated by him.” – Karl Marx

“Give us the child for 8 years and it will be a Bolshevik forever.” – Vladimir Lenin

“The end may justify the means as long as there is something that justifies the end.” – Leon Trotsky

“You must obey the law, always, not only when they grab you by your special place.” – Vladimir Putin

“We of the sinking middle class may sink without further struggles into the working class where we belong, and probably when we get there it will not be so dreadful as we feared, for, after all, we will have nothing to lose.” – George Orwell

Deron’s Daily ETF Analysis

Yesterday, on a burst of volume, the iShares Nasdaq Biotechnology ETF (IBB) undercut its 20-day EMA but reversed to close near session highs. A move above the three day high of $123.94 could provide a buy entry trigger in this ETF. We are placing IBB on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.


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.


Jake’s Take

Harp’s Roadmap

Cara on the Metalminers

Cara on the International Markets

CTA Trading Desk Mid-Day Report

CTA Trading Desk Post-Close Report

  1. 8:30 AM ET Empire State Mfg Survey 9:00 AM ET Treasury... [#110241]
    By: davefairtex (5215 comments) Go to top ↑
    • 8:30 AM ET Empire State Mfg Survey
    • 9:00 AM ET Treasury International Capital
    • 9:15 AM ET Industrial Production
    • 9:55 AM ET Consumer Sentiment
  2. 1 in Accumulation Zone 8 in Buy alert 1 in Distribution... [#110242]
    By: davefairtex (5215 comments) Go to top ↑
    • 1 in Accumulation Zone
    • 8 in Buy alert
    • 1 in Distribution Zone
    • 1 in Sell alert

    Accumulation Zone (13%): Monthly 14, Weekly 22, Daily 4
    Distribution Zone (7%): Monthly 10, Weekly 4, Daily 8

  3. ... [#110243]
    By: Les (7233 comments) Go to top ↑
  4. Good morning. 08:30 Empire Manufacturing (2.3 vs 13.5... [#110245]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    08:30 Empire Manufacturing (2.3 vs 13.5 expected)
    09:00 Net Long-Term TIC Flows
    09:15 Industrial Production
    09:15 Capacity Utilization
    09:55 Mich Sentiment


    EXC – Exelon downgraded to Neutral from Overweight at Atlantic Equities based on increased risk of new generation natural gas plants being built resulting in prolonged low power prices. Price target cut to $37 from $59.

    ORCL – Oracle upgraded to Buy from Hold at ThinkEquity based on valuation, negative investor sentiment, and positive checks that indicate a steady business. Price target raised to $33 from $28.


    Outside the Cara 100 Universe:

    GOLD – Randgold Resources upgraded to Neutral from Sell at Goldman.


    “Immigrants used to come to America seeking freedom of speech, freedom of religion, and freedom from government. Now they come looking for free health care, free education, and a free lunch.” ~ Harry Browne

  5. Good morning Baz; This chart looks great and someone is... [#110246]
    By: ea32da32 (2362 comments) Go to top ↑

    Good morning Baz; This chart looks great and someone is accumulating at this level! I simply can’t risk anything long/short this market; it’s a correction market and of course there are some company’s moving higher but the way it’s chopped up I can’t reason out a swing trade and as much as I dislike day trading (because I suck at it and haven’t had the chance to really study this) it’s all I feel comfortable with – eked out at $270 net profit after reviewing yesterday and ALL because of that flash blow up move toward the end of the day stopped me out of two trades going my way – you can’t walk away…

    I see TLT is moving higher this morning – Empire Manufacturing missed big 2.29 vs. 12.50 est. It’s very possible I find something else to do today but I need to watch – I’m sure CNBC will be in full rip your head off positive/negative mode. I don’t watch it but I do wish Rick Santelli had his own show.

    I’m still looking to go long AMRN on a breakout of this wedge with 6MM+ shares. Alert set…


    • Yeah, Bubblevision !! Those guys... had Jim Rogers on a... [#110254]
      By: baz22 (2875 comments) Go to top ↑

      Yeah, Bubblevision !! Those guys… had Jim Rogers on a couple ago, for Extended period. Asked repeatedly what he would do with common stocks, he had to keep answering stay out or short. Well, of course, after the quick dip, Boom !! Same yesterday… They noted (F.B.’s) Zuck’s meeting yesterday, per Goog, so I gritted my teeth, and bought at $ 27.60… just sold. Its all a dog and pony show, Take care…

      • I'd love to see SPX 1360 on lighter volume - I may actually... [#110255]
        By: ea32da32 (2362 comments) Go to top ↑

        I’d love to see SPX 1360 on lighter volume – I may actually risk 20% of account to go short. I have one order in on MA puts but the only way it would be filled is for a flash up like yesterday. Of course this market will do exactly what I don’t expect so I’ll trade accordingly LOL.

  6. Following names are being added today - indexers will need... [#110247]
    By: ennar (21 comments) Go to top ↑

    Following names are being added today – indexers will need to buy at the close – possible end of day pop

    Poseidon Concepts – PSN
    Northern Property Trust – NPR
    Wajax – WJX
    Enbridge Income Fund – ENF
    Martinrea Intl – MRE
    Black Diamond Group – BDI

  7. I've known Loren for a very long time, a business writer... [#110248]
    By: ea32da32 (2362 comments) Go to top ↑

    I’ve known Loren for a very long time, a business writer for the Houston Chronicle. Anyway, here is my reply to a question I asked but was really drawing the distinction between Allen and maybe a Corzine; there really is no comparison; Jon is to me more like Putin, a honeybager that does not give a s*** and puts on a great public show at senate hearings. Allen did get what he deserves in my opinion. But I can sure appreciate the comments yesterday, take one WS bad guy down and the rest start to fall. Hummm, we have no Eliot Ness types anywhere; they only exist in history books so it’s game on for WS.

    @lsteffy: @ea32da32 Stanford did give money to Obama. It’s among the $1.7 mln that hasn’t been repaid.

  8. CCL - estimates, target increased at BofA/Merrill. CCL... [#110249]
    By: Bull Hunter (3552 comments) Go to top ↑

    CCL – estimates, target increased at BofA/Merrill. CCL estimates were raised through 2014. Company has strong operating momentum. Buy rating and new $39.60 price target.

    COST – estimates boosted at BMO through 2013. Mexico acquisition should add to earnings. Underperform rating and $55 price target.

    SNDK – estimates, target cut at BofA/Merrill. SNDK estimates were reduced through 2013. See lower OPM and bit growth. Buy rating and new $56 price target.

  9. Hi.. No, my views on basics of ' amrn ' have not changed... [#110250]
    By: baz22 (2875 comments) Go to top ↑

    Hi.. No, my views on basics of ‘ amrn ‘ have not changed. Great product and great future. I just don’t know if the FDA PDUFA is a slam dunk. There could be a delay on manufacturing questions. If there was a delay, it could probably be picked up for 20% less than today. But, I could be dead wrong, and have to get back in at a much higher price. However, with the overall markets’ instability, I hate to waste profits. Earl and I had highlighted AMRN in the low $ 9, and I have been in and out twice since then. I still think this one is a big win, but I had quite a few shares, and prefer to rebuild when there is less risk in the general market. Take care.

  10. EXC - The nuclear power play, cut elsewhere today, is... [#110251]
    By: Bull Hunter (3552 comments) Go to top ↑

    EXC – The nuclear power play, cut elsewhere today, is reinstated with an Equal Weight by Barclays.


    Michigan Sediment [sic]:

    74.1 June vs 79.3 May

  11. ... [#110253]
    By: Bill Cara (4105 comments) Go to top ↑
    • Thanks for this report; I'd been looking at this sector for... [#110256]
      By: goldbug58 (370 comments) Go to top ↑

      Thanks for this report; I’d been looking at this sector for a couple of weeks now; for a simple commodity it’s pretty complex to analyze.

  12. We are at the 38.2 retracement pt ~$22.55 and there is a... [#110252]
    By: ea32da32 (2362 comments) Go to top ↑

    We are at the 38.2 retracement pt ~$22.55 and there is a gap that could be filled at $22.25 which could ‘possably’ take SPX somewhere between 1350 and 1360. I’m planning for anything…

    OIL – .XOI – also getting supported, Dollar .DXY drifting down… DJT poised to charge 50dma

    I’m just looking at some things…


  13. Former Goldman Sachs director, Rajat Gupta, is found guilty... [#110257]
    By: Bull Hunter (3552 comments) Go to top ↑

    Former Goldman Sachs director, Rajat Gupta, is found guilty of insider trading:


    HB & B – 6013
    People – 1

  14. Dear MONROE: The New York City Municipal Archives has... [#110259]
    By: Bill Cara (4105 comments) Go to top ↑

    Dear MONROE:

    The New York City Municipal Archives has recently released on the web a database of over 870,000 photos taken throughout the 20th century.
    Their subjects include daily life, construction, crime, city business, aerial photographs, and more.

    I posted on our web site a small sample of these photos. If interested, you can see the photos clicking here. The file might take a bit to download,

    If you are interested to see the whole database, click here

    I am sure that for many of you, these photos will bring back fond memories of you youth.

    Enjoy it!

    Giancarlo Bisone

    • Bill, There is another wonderful work entitled "New York... [#110270]
      By: moragakd (47 comments) Go to top ↑


      There is another wonderful work entitled “New York City Market Analysis of New York” done in 1943 with 1940 Census statistics, “City of 100 cities,” with pictures and a trove of data available online:
      This document is in the public domain and is made available through Center for Urban Research at the CUNY Graduate Center:

      It is marvelous how the web opens New York’s past for everyone today.

  15. $USD has been under some pressure since May 30 with only... [#110260]
    By: Bill Cara (4105 comments) Go to top ↑

    $USD has been under some pressure since May 30 with only two days out of eleven having bullish trading. Presently, the contract is trading about 81.68, and a Weekly SELL ALERT would come around 81.50. There was a Daily SELL ALERT at about 82.40. So, as long as the US Dollar closes each day below where it is now, I think there will be near-term upward pressure going forward on equities, commodities and precious metal prices.

  16. I believe Kaimu has written about such things many times... [#110261]
    By: ea32da32 (2362 comments) Go to top ↑

    I believe Kaimu has written about such things many times

  17. A really comprehensive presentation by Martin Armstrong... [#110262]
    By: CaptK (71 comments) Go to top ↑

    A really comprehensive presentation by Martin Armstrong dealing with many aspects of gold. One of his best articles yet. A must read whether you have gold in your portfolio or not.

    • CaptK - Thanks for the Armstrong link. He is always... [#110263]
      By: davefairtex (5215 comments) Go to top ↑

      CaptK -

      Thanks for the Armstrong link. He is always interesting to read. Some of his arguments boil down to “boy, is that guy stupid” (which aren’t so compelling to me) but others are better supported.

      The bits about government wanting everything electronic makes great sense, linked to currency cancellation and underground economies. And the hints about how complex is the world financial system – that’s way cool too. Worth a read.

    • ... [#110264]
      By: Grym (5469 comments) Go to top ↑
  18. ... [#110265]
    By: westcoaster (1130 comments) Go to top ↑
    • ALOHA!! The scheme would permit private British banks to... [#110267]
      By: kaimu (3289 comments) Go to top ↑


      The scheme would permit private British banks to pledge their existing, illiquid loans as collateral at the Bank of England in exchange for highly liquid UK government bonds, which they could then sell on.

      I like how they use the word “scheme”, although “scam” would have been a better choice! That was already tried with MAIDEN LANE here in the USA. The banks got about 100 cents on the “fair value” dollar for their now useless collateral. Then they loaned to business and households based on much more stringent lending criteria than the SubPrime “heartbeat loans” they based that MBS collateral on!

      Even when I started a company in the 1990s we could not get a SBA loan because we had to first prove we did not need a loan in order to qualify for one. That meant putting up our houses as collateral. HA!! What good is a bank’s “commitment to loan” when hardly anyone qualifies or wants to qualify?

  19. ALOHA!! We can make currency anything if we all agree. I... [#110266]
    By: kaimu (3289 comments) Go to top ↑


    We can make currency anything if we all agree. I read Martin Armstrong and the key is the C WORD as I have explained many times. Right now virtually nobody outside of politicians and bankers trust government. Not even government employees trust government. Go to some of the government employee websites and read the forums and you will see posts about how they fear their pension fund mainly invests in US Treasury debt by law.

    Interesting timing as I was going to write about a recent deflationary event that occurred last year yet none of us heard about it. It was a monetary crash that was never reported. Armstrong mentioned BITCOIN. Bitcoin is a currency not based on “debt”. It has a restricted supply. Bitcoin had its first deflationary crash last year. The USD exchange rate went from $32BC/USD in 2011 to $6 today. Not because the “bitcoin” currency and its MIT approved mathematically encrypted logarithm formula was bad but because one of the “wallets”(a bitcoin term for private bank)failed. The owner of the wallet simply closed down and left town so if you had your wealth stored there you lost it all. No FDIC!

    Go to this video to see the consequences …

    It seems where you store your “wealth” is the problem. Who you trust is always a huge potential error. The human condition runs every bank and every company in the world. The CEO can be a genius like Einstein, but if he or his upper management commits crimes and the C WORD kicks in then the company is worthless. Same goes for banks and same goes for governments. Right now we live in a “lesser evil” world. Not exactly the best component to forestall a C WORD event. Almost every investor and trader now lives and sleeps right next to the “sell” button!

  20. ... [#110268]
    By: Jack Senett (438 comments) Go to top ↑


  21. NGD traded down on titanic volume after the close. I... [#110271]
    By: Tower Dog (90 comments) Go to top ↑

    NGD traded down on titanic volume after the close. I checked a lot of other miners. There was big volume in many after the close. Is this normal for quarter end or opex?

    • Many of the miners I follow had big volume spikes at the... [#110277]
      By: ChrisM (279 comments) Go to top ↑

      Many of the miners I follow had big volume spikes at the end of the day, not all closing lower: ABX, GG, KGC, GBG
      As to significance, I don’t know anything, except that it wasn’t me :-)

  22. An interesting interview with Bob Hoye who sees a new bull... [#110272]
    By: Juniorgoldminerseeker (228 comments) Go to top ↑

    An interesting interview with Bob Hoye who sees a new bull for the gold miners if we see a successful test of the bottom. Clearly similar thoughts have been put forward by the team here.
    Hoye has a more deflationary bias and sees this move limited to gold, not general commodities, or even silver. He is also someone who sees gold and the US$ moving up together. Hoye also sees a true bull for the miners including dramatic moves in explorers led by discoveries and area plays. The large sums of money raised over the past 10 years should lead to a discovery cycle.

    I find it interesting that the V-bottom in the miners in Mid May aligns very closely with the breakout of the “real price” of gold from an almost year long consolidation, here defined as the Gold:CRB ratio

    The “hits” on gold miners today like New Gold may be associated with those stocks held by the big ETFs, GDX/GDXJ.
    There are a number of stocks showing big gains today. Canadian “Old Mine Re-openers”, PC Gold, Armistice and Barkerville all jumped dramatically over 25%.
    Disclosure, own PKL / AZ

    • ALOHA!! The "hits" on gold miners today like New Gold may... [#110274]
      By: kaimu (3289 comments) Go to top ↑


      The “hits” on gold miners today like New Gold may be associated with those stocks held by the big ETFs, GDX/GDXJ.

      You might want to take note of the ASX listed stocks that the GDXJ is “buying”. One of my holdings is RMS(ASX). The GDXJ is buying RMS.

      • Kaimu, Ramelius' chart certainly looks Canadian/US-like... [#110280]
        By: Juniorgoldminerseeker (228 comments) Go to top ↑

        Ramelius’ chart certainly looks Canadian/US-like now..!

        As you often point out their cash holdings, AU$60m, profitability, emerging production and greenfield potential projects are impressive for AU$180m market cap. Ramelius’ latest presentation.

        Jim Sinclair particularly aggrieved by Friday’s action in the gold stocks.

        As pointed out above and by ChrisM however there were both big gains and losses near the close.
        Don’t think I understand what effects Triple Witching could have had?

        A good interview with John Hathaway of Tocqueville Asset Management, with a clear bias of course. Sees the gold bottom in and the miners will lead in the next cycle due to re-rating and their optionality to higher gold prices.

        One I missed just after the spike-bottom in Mid-May, well presented case for the gold miners at PragCap

        • ALOHA!! The problem with RMS was mine life at Wattle Dam... [#110285]
          By: kaimu (3289 comments) Go to top ↑


          The problem with RMS was mine life at Wattle Dam. You can see it still is if you look closely at the presentation(production at Wattle Dam ends in June 2013) which is why their diversification strategy. Unlike SLR it seems RMS did not resolve that issue early on and so now must option dilute at lower share prices. I sold off a major portion of my holding in RMS due to the mine life issue and then just did not follow the company until recently. Its future depends on the new mines coming online.

          On slide #3 of your presentation link where you see “Van Eck:6%”, that is the GDXJ component. You also see Sprott has 15%, but I doubt Sprott bought in at $0.45A. If you look at recent news releases you will see that the GDXJ just recently bought more shares of RMS at a lower price. That is what caught my eye to renew my interest. Now the share price looks more attractive, but the other mining projects coming online are nowhere near as high grade and low cost as Wattle Dam was, the mine that made RMS in the beginning. Sad to see they did not execute like SLR did in the early stages. Still worth a look …

  23. ... [#110273]
    By: kaimu (3289 comments) Go to top ↑
    • Quote: During the years 2004 through 2007, Discovering... [#110276]
      By: ChrisM (279 comments) Go to top ↑

      During the years 2004 through 2007, Discovering Hidden Hawaii Tours, Inc. earned gross income subject to S Corporation income taxes and general excise taxes ranging from over $1 million to $2.2 million dollars each year.

      I read that as $1m to $2.2m gross income, not tax owed. So I don’t think he made out quite as well as you suppose.

      • ALOHA!! Yeah, I thought it read that way at first but then... [#110281]
        By: kaimu (3289 comments) Go to top ↑


        Yeah, I thought it read that way at first but then Snorkel Bob’s GE taxes were $900,000 per year and all they do is mainly rent snorkeling gear on all the islands! HA!! Discover Hawaii is a much bigger operation with flights and tours to other islands and they do a lot of business with the Asian tourists and special corporate conferences on all the islands. I think the only tour group bigger than them is Pleasant Hawaiian Holidays.

        Then if you look up FY2008 GE delinquent tax amounts they are listed at $374MIL. These tour groups rake in big bucks! Hawaii has the advantage of having a full year season since the weather is nice year round. Plus we get a lot of Asians because we are a lot closer to Asia than any other tourist destination in the USA or Canada.

        The deal is for people like me who do business out of state I get a 100% “exemption” on all gross sales out of state. These guys get no exemption since they mostly operate within the State of Hawaii and they pay 4.167% on retail whereas I only pay .5% for “in-state” sales on a wholesale level, which is most of my Hawaii business.

        “Democracy is when the indigent, and not the men of property, are the rulers.” – Aristotle

  24. with two attorneys that served on the staff of Senator Sam... [#110275]
    By: baz22 (2875 comments) Go to top ↑

    with two attorneys that served on the staff of Senator Sam Ervin. My gosh, what an insight they had into the trial of Richard Nixon. Both from NC.

  25. I haven't reviewed the Fed Z1 for a while, so this weekend... [#110279]
    By: davefairtex (5215 comments) Go to top ↑

    I haven’t reviewed the Fed Z1 for a while, so this weekend I took a look at the latest numbers from our friends at the Fed.

    In Q1-2012 (seasonally adjusted, annualized rates):

    * -2.9%: home mortgage market deflates, slightly faster than 2011
    * +5.8%: consumer credit inflates (student and auto loans, apparently), faster than 2011
    * +5.2%: business credit inflates, on par with 2011
    * -1.8%: state & local government deflates, on par with 2011
    * +12.4%: federal government inflates; slightly faster than 2011
    * -1.8%: financial sector deflates, more slowly than 2011

    Overall, total credit +4.7%, slightly faster expansion than 2011. Big winner was the Federal Government. Biggest loser was home mortgages. I’m going to guess housing prices nationally aren’t going to see a bottom until mortgage numbers stop deflating. And this with long rates at all time lows!

    RItholtz posted the latest Case Shiller numbers on his site which seems to bear this out. Numbers lag by a few months, so perhaps we’re behind real life, but as of March, things didn’t look great.

    How much deflation exists behind the curtain in the financial sector is the big question to me. Mark to myth is still in operation, so we just don’t know.

  26. Bill Fleckenstein interviewed on King World News. The... [#110282]
    By: Bull Hunter (3552 comments) Go to top ↑

    Bill Fleckenstein interviewed on King World News. The FleckMeister opines on Europe, MNGGH/YAK, the FED, gold/miners and market direction:

  27. A Conversation on Europe's Political Economy with George... [#110283]
    By: Grym (5469 comments) Go to top ↑

    A Conversation on Europe’s Political Economy with George Friedman and John Mauldin
    June 13, 2012 | 1402 GMT

    George Friedman is the author of “The Next Decade.” which I Highly recommend.

    After just watching this video in which Friedman emphasizes the importance of national inpependence I was struck by the quote from the Greek response to the article in the German edition of the Financial Times below.



    Greeks rail against ‘crude’ German editorial
    Published: 15 Jun 12 16:02 CET

    Syriza condemned the editorial as “a crude and unprecedented intervention, which offends national dignity and tries to undermine democracy.”

  28. ... for SPY, IWN, QQQ with week's event comments by... [#110284]
    By: Vadym Graifer (4341 comments) Go to top ↑

    … for SPY, IWN, QQQ with week’s event comments by Nemo

    Also, load of (insert the word of your own choice here). Upon reading this, I experience ever stronger desire to see Greece shrugging off this nonsense and leaving.

    (GR) Eurogroup Pres Juncker: if the radical left Syriza party wins Greece elections on Sunday, it could have “unpredictable” consequences for the euro zone; will be in contact with ECB’s Draghi on Sunday – Austria press interview (What’s so unpredictable about it? It will fall apart in any case, Greece exit will only shorten the agony!)
    - Warns against any nation seeking to leave the euro zone as “the internal cohesion of the euro zone would be in danger.” (What cohesion? You guys are at each other’s throat day in day out)
    - The Greek people must be aware that a euro exit “would send a devastating signal.” (Yes, be aware of that and do that – devastate what has to be devastated to clear the road to viable structure)
    - There will be NO renegotiation of the substance of the Greek bailout agreement [as Syriza has called for]. (Oh good, that’s exactly what Greeks want to hear – especially after Spain getting no-conditions-attached bailout).
    - Will be in contact with ECB President Draghi and EU economic affairs commissioner Olli Rehn on Sunday evening. (To shriek in horror together, I assume)

  29. ... is up. Happy Father's day. Now I get to... [#110286]
    By: Bill Cara (4105 comments) Go to top ↑

    … is up.

    Happy Father’s day.

    Now I get to celebrate.

  30. ... [#110287]
    By: CaptK (71 comments) Go to top ↑
  31. Richard Wilkinson: How economic inequality harms societies... [#110288]
    By: indptrader (55 comments) Go to top ↑

    Richard Wilkinson: How economic inequality harms societies. Enjoy.

  32. Article at the FT by Gavyn Davies (ex Goldman banker... [#110289]
    By: Juniorgoldminerseeker (228 comments) Go to top ↑

    Article at the FT by Gavyn Davies (ex Goldman banker) reviewing the significantly increased likeliehood of QE3 at next week’s FOMC, as per Bill’s WIR.

    Goldman’s model puts probability at 75%.
    Reinhart of Morgan Stanley who in the past attended FOMC meetings puts probability at 80%.

    Today’s Sunday Times in the UK elaborated on the Bank of England QE actions of last week. In addition to buying bank loans the BOE will allow banks to reduce reserve levels.
    Also mentioned are European plans to introduce “Balladur bonds” whereby governments raise cash with the promise of shares in future privatisations of government assets lowering interest rates.

    ” ‘This will not be a repeat of the Lehman collapse’ said a senior executive at one American investment bank, ‘the world is ready this time’ “

    Pushing on a string?

    Time to review Bernanke’s “making sure it doesn’t happen here” ?

  33. ... [#110290]
    By: BOB 47 (361 comments) Go to top ↑
  34. Hi Bill, In reading the initial economic data provided in... [#110292]
    By: Les (7233 comments) Go to top ↑

    Hi Bill,

    In reading the initial economic data provided in your WIR, I was reminded of an article suggesting that inflation is the new FFR, given the changing paradigm post-2008:

    What is important to note is the correlation between the FFR and the ECRI USFIG (future inflation gauge). Bernanke may be monitoring the FIG as his basis for making decisions on QE. See the first attached screenshot, which is from the following link:

    Note that USFIG remains upwards bound as of May 2012 with a reading of 102.3, following from 101.4 in April:

    I took a quick look at the data coming out in June for May. Note the difference between PPI and CPI. First up is US PPI for May. See attached.

    PPI is almost in deflationary territory. However, CPI is not. It has however, topped out. BUT, with margins improving for US producers of goods while CPI remains relatively high (even if it is muted) for consumers, then I have to question a decision by CB’s here to begin coordinated easing efforts.

    Any near term decision to begin QE runs the risk of another inflationary lift-off in commodity assets, which feeds into PPI. I do note the downward channel $CRB is trapped in, which is likely to lead to a bounce if new QE is proposed (chart by Sinn):

    But with CPI remain relatively elevated, what is the risk of CPI shooting higher and squeezing the consumer, thus contracting the economy even more? Sounds counter-intuitive to me to start monetary easing at this time.

    There’s no risk of consumer deflation on the cards for the next month or two. Remember Super Mario at the ECB insists that price stability is his job. And the EU CPI is in the sweet spot at this time. Inflation is clearly required in order to inflate away the debts, but I wonder if they are willing to commit to easing (and risk political/public wrath) while CPI is only slowing down, but not yet clearly deflationary. See further attached charts of various CPI graphs for China, EMU etc.

    See the last link, which illustrates ECRI growth rate cycle peak and trough dates, which show the US peaking out in May 2010. See attached graph. Note how CPI lagged this growth peak by ONE YEAR, as US CPI topped out in 2011. Bernanke is pushing on string and it appears in my mind that inflationary pressures menace any suggestion of further monetary operations at this time.

    On the question of The Fed offering QE before the election gets under away, so as to appear politically neutral, well I’ve seen enough now to believe The Fed capable of pulling a rabbit out of its hat just weeks before people vote. Remembering that the majority of voters make their final decision only some 2 weeks before the event, my mind is open to Fed funnies in July or even August.

    But as Geoff points out, price will decide in the end, and one can await the thrust out of this consolidation before committing. It just appears to me that too many are getting bullish on Fed intervention at this time, when the case for easing is not yet solid (i.e., when deflationary risk manifests itself).