It’s Wednesday morning, and I’m back in civilization, having spent much of the past two days in the Montana wilderness touring a silver mine. I’m sitting in the same chair at the Spokane airport as the one I wrote my Monday RANT from – “HUMAN NATURE, PART I – , and I have several hours of waiting time, so I’m raring to go. HUMAN NATURE, PART II is still waiting in the wings, but will have to wait as the world is moving too fast to slow down for even a SECOND.
In my brief minutes with WiFi access yesterday, and at in the wee hours of last night, I downloaded an incredible amount of “horrible headlines”, one worse than the next. Readers, we are witnessing the global banking collapse I’ve been warning of for some time now, and simultaneously TPTB step up market manipulation in an exponential manner, to a level NEVER seen in financial history.
If there was a way to chart the correlation between the Dow and bad news (“or horrible headlines”, as I call it), I’d love to do it, as right now it would be showing a 5+ standard deviation surge, no different than the 5+ standard deviation Precious Metal declines we have regularly seen since OPERATION PM ANNIHILATION commenced MINUTES after the Labor Day holiday.
Fortunately, the PHYSICAL gold and silver markets have fallen far less thanks to expanding premiums (particularly in the retail segment of the market), but it still is painful watching your pockets picked as the reasons for gold and silver to EXPLODE grow stronger each day, or hour for that matter.
Yesterday (Tuesday) morning, we awoke to see a string of “horrible headlines” as long and deep as any I can remember, which in freely traded markets would have yielded a stock market collapse and gold explosion.
To start, bleary-eyed, somnambulant NY traders were treated to the lowest Chinese GDP result in two-years, signaling that even the world’s fastest growing economy is slowing down. But alas, a large part of the even the ‘world’s most powerful growth engine’ is government MONEY-PRINTING, which by some estimates has outpaced even the Western printing presses in recent years.
THIS is what happens when you overprint your UNDERVALUED currency to PEG it to an OVERVALUED one, and thus why Chinese inflation will NOT slow down until it revalues the Yuan.
Next, the near daily credit downgrades, in this case led by Standard & Poor’s downgrading 20 (insolvent) Italian banks. Remember, as I wrote last week, we will likely NEVER see a municipal or sovereign credit UPGRADE in most of our LIFETIMES.
I’m JUST GETTING STARTED on the downgrades, as Moody’s followed Fitch’s lead by downgrading Spain two notches, and still keeping it on negative watch…
…while announcing that France, the second largest economy in the EU, is hanging on to its BOGUS triple-A rating by a thread. Readers, don’t kid yourself about the sudden “religion” found by these insipid, sniveling, rating agencies. They are desperate to regain credibility after losing it entirely over the past decade, but still have an unspoken agreement to avoid downgrading the most important global credits.
Yes, S&P took the U.S. down ONE NOTCH in August, but none of the other agencies followed (why would they, as S&P’s CEO was immediately FIRED?), and neither have they touched the linchpins of Europe, the sovereignties of Germany and France. France, in particular, is no better off than Spain or Italy due to its ENORMOUS exposure to the PIIGS, and in due time Moody’s and the other rating agency frauds will be forced to acknowledge it.
This is why PPT STOCK MARKET SUPPORT is so important to the leading Western governments, as without it the DEATH SPIRAL would commence NOW, forcing these agencies to “ride the tide” and unleash the full fury of credit downgrades.
These downgrades led to yet another morning SURGE in Euro CDS rates…
…ultimately yielding yet another draconian act of stupidity, the banning of “naked CDS shorting” by European regulators. Once again, we have officially entered the theater of the absurd, as each new headline makes less sense than the last. How can you short something that cannot be borrowed, and what’s to keep traders from simply shorting sovereign bonds themselves?
Not to mention, DESPITE non-stop, maniacal PPT support, many French, Italian, and other European bank shares are AT OR BELOW the levels traded traded at when shorting them was banned in August, by the same “European regulators”, of course.
Heck, one of THE major downside catalysts of GLOBAL MELTDOWN I was the SEC ban on shorting “25 key financial stocks” in late 2008 (if I had access to the internet here, I’d show you the announcement, and subsequent XLF chart)!
…meanwhile, Greece sinks deeper into hell, with literally every aspect of society collapsing. But don’t worry, they’ll be bailed out forever…
…Portugal’s “austerity measures” go the way of the DoDo…
…and even mighty England (facetious) reported surging inflation amidst its ongoing economic collapse. And we’re still not up to the AMERICAN morning news yet!
Amidst all this financial horror, global markets were down sharply, threatening a continuation of Monday’s terrible Dow action and potentially reversal of all the good work put in by the PPT to create PERCEPTION that strong stock markets are “signaling” a European bailout is not only imminent, but will unquestionably SAVE THE WORLD!
So let’s see what happened when the U.S. woke up. Could America turn the tide of horrible headlines, once again SAVING THE DAY as so commonly occurs (by coincidence, of course) during U.S. trading hours?
OK, first out of the chute is the PPI inflation report, to start our day off with a dose of manipulated statistics. What’s this, a horrific report TWICE expectations, with even the core rate higher than anticipated?
I won’t even go into the growing stream of high-profile retail stock collapses, such as Netflix last week and Crox and Green Mountain Coffee this week, let alone earnings misses from major companies such as IBM and even divinely-touched Apple.
Instead, I’ll go right to the top white-criminals on earth, whom EACH put Enron, Worldcom, and Bernie Madoff to shame.
Let’s start with everyone’s favorite WALL STREET FRANCOPHILES… Morgan Stanley. No surprise, they employed the same fraudulent accounting as JP Morgan and Citigroup to generate PAPER profits that did not exist…
…or Syndicate kingpin Goldman Sachs, who actually reported its first LOSS in more than a decade thanks to its PATHETIC proprietary trading team, who managed to lose $2.5 billion despite access to the most concentrated inside information in the world! Yes, GS investors, not only is your company losing money where monkeys could be profitable, but proving it is NOT IN ANY WAY living up to the “bank holding company” conservatism it promised when granted that status in 2008 to be eligible for TAXPAYER-FUNDED TARP BAILOUTS!
Heck, one rating agency was so bold to even DOWNGRADE Goldman after its ratings debacle. Goldman, home of the “world’s smartest bankers and traders”, can you imagine the gall? Let’s hope Egan-Jones’ management team has eyes in the back of their heads.
But why dwell on the “brilliance” of Goldman Sachs when we have a vastly easer to target to torment, the chronic morons running Bank of America.
To start, they too used the same fraudulent accounting to turn losses into “profits”, but that’s NOTHING compared to what else they did…
In typical Wall Street criminal mode, America’s largest bank (and largest future bankruptcy) stealthily moved its ENTIRE $53 TRILLION DERIVATIVES BOOK from the holding company level to its bank subsidiary. You know, the one backed by FDIC insurance, so taxpayers can once again foot the bill for criminally-generated Wall Street losses. Too bad FDIC is insolvent as well!
No matter, the Feds will just charge higher dues to the smaller, rule-abiding banks, making up the difference with FRESHLY PRINTED MONEY.
And speaking of banks that blew themselves up, let’s see what everyone’s favorite former “quasi-government” entity, Fannie Mae, the largest owner and originator of mortgages in the WORLD, has to say about the future of the mortgage business.
Wow, not so good, another 7% housing price decline over the next 12 months. I wonder how the cratering U.S. economy will respond, particularly in light of the massive Alt-A interest rate resets staring us right in the face (per the chart I published this weekend, and ongoing collapse of the PrimeX mortgage index).
After all that, sprinkle in some other “horrible headlines” to add icing to the cake, and we have the perfect formula for a global stock meltdown and gold price explosion.
But what’s this?
Amazingly, just as the NYSE opened for trading, all Western stock markets rocketed upward. Gold, which for some amazing reason fell $40 in the wee hours of the morning (gee, I wonder what “amazing reason” that was), remained at its lows while banks SOARED, even Morgan Stanley, Goldman Sachs, and Bank of America. Heck, even OIL was up for the day. Hooray for free markets!
It was only a matter of time before the “official explanation” of how the FIVE aforementioned PAGES of horrible headlines” could be negated in minutes, as ALWAYS in the PPT-dominated NYSE trading session.
And here it is…
…wow, what a shock. More rumors of rumors of plans to plan to agree on an increase in the EFSF PRINTED-MONEY SLUSH FUND to bailout bankers stupid enough to lend money to the PIFIGS.
Not to mention, fresh MONEY-PRINTING to buy sovereign European BONDS, which continue to plummet no matter how high the PPT takes bank STOCKS, both yesterday (Tuesday)…
…and again today, as apparently the 400 point Dow increase that swept up all manners of bank stocks failed to even dent the CREDIT MARKET contagion…
…which, by the way, yielded a FAILED GERMAN BUND AUCTION THIS MORNING! Can you imagine what would happen to insolvent AMERICAN Treasury Bonds without “Operation Twist” and the trillions of COVERT QE programs being utilized to support them?
Readers, THIS is what I have been talking about for weeks, the TOTAL, COMPREHENSIVE HIJACKING OF FREE MARKETS since Labor Day by the now GLOBAL PPT and PROPAGANDA TEAMS. We are truly at the end of the global fiat PONZI SCHEME, wherein the ONLY tool left in the arsenal of Western Central Banks is the ALL-TIME BAZOOKA of UNFETTERED, COVERT QE channeled into the financial markets (stocks and bonds on the long side, PAPER gold and silver on the short side).
This BRAZEN, BLATANT, blatant manipulation, which I now see has been duplicated EXACTLY today, will only intensify until it EXPLODES in their face, likely due to the UNRELENTING, GLOBAL EXPLOSION in demand for REAL, PHYSICAL GOLD AND SILVER.
Per the link below, U.S. silver eagles are quietly on pace for their second strongest sales month of the year, encouragingly far stronger than in May, right after the SUNDAY NIGHT PAPER SILVER MASSACRE of May 1st. GLOBAL investors are FINALLY realizing that BUYING ON DIPS is the proper strategy for investing in MONEY…i.e. Precious Metals, and I ASSURE you this trend will only intensify in the coming months.
Before I go, as I am getting quite wordy (not my fault, thank the litany of “horrible headlines”), I want to comment on the news last evening that the CFTC “approved” position limits on metals trading, after EONS of faux debate regarding the blatantly obvious criminality stemming from deregulation of the Wall Street mafia dons.
In a word, I’ll tell you what I think of this “historic decision” – BULL—T!
Sorry for the near curse, but the CFTC, contrary to the headline below, DID NOT vote for position limits, not even close. And if Ted Butler says they did, as he always does in his eternal HOPE that evil will magically turn good, he is delusional.
Per the commentary below, the 3-2 YEA vote contained a caveat from a CFTC governor who is “about to retire” that he may change his mind! You’re kidding, right? NEVER in 41 years of life have I heard of a vote with such a contingency inserted into the decision, something that could ONLY happen in the world of PAPER gold and silver trading!
Not only that, the decision is NOT even final, as it states the position limits will not be implemented until 60 days after the CFTC board determines the DEFINITION of a SWAP – with NO TIME FRAME for such a determination given!
CFTC Votes 3-2 to Approve New Limits on Commodity Speculation
All opening statements by each voting member is available on CFTC site.
Vote went (as expected) along party lines ie: a 3-2 vote to approve position limits.
Despite Michael Dunn (D, about to retire) reluctantly backing new limits, hinting he may overturn, (see highlights of his speech below…) he voted “Yes”.
- Deliverable Supply: Ultimately it comes down to the Exchange (“Deliverable supply will be determined by the CFTC in conjunction with the exchanges” – CFTC only has duty to update /reassess every 2 years, but leaves setting the limit up the Exchange, and the latter surely wouldn’t want to reduce volumes/business….
- Due to be implemented 60 days after the agency determines the definition of “swap” (and they declined to give a date when this will occur…)
- 25% of Deliverable Supply is the limit for SPOT positions. Currently there are quite a few spot (expiration) month limits which (I’m sure) are a function of deliverable supply.http://www.cmegroup.com/market-regulation/position-limits/ However, despite listening in to (part) of the meeting, it’s still unclear how they determine Deliverable Supply / what the standard “long measure” is… Commissioner Sommers said she’s concerned these won’t be updated (an example is published deliverable supply levels were last updated in 2005. Once DF is implemented in 2012, this implies the figures will only be updated in 2014! – a decade long lag…)
- Reiterated they are not in business of “price setting” but want to allow price discovery.” However, they still don’t have a definition for “Excessive Speculation” and cannot prove this causes higher prices or the financial crisis. 12 months after the position limit implementation, the agency needs to do a study on the “effects of position limits” and if it has any unintended consequences, they said they’ll take the necessary action.
This “decision” is a sham, a ruse, and a sheer disgrace, highlighting just how brazenly corrupt the U.S. government has become. I have LONG ESPOUSED there is NOT A CHANCE IN HELL the Gold Cartel (i.e. the U.S. Government) would NEVER bring itself down, particularly via a stupid legislative ruling, which is what this essentially is.
It will ONLY only be destroyed by the DETERMINATION of PHYSICAL Precious Metal buyers to overtake them, and I ASSURE you this WILL happen.
In the meantime, OPERATION PM ANNIHILATION has caused PM sentiment to drop to the lowest level Bill Murphy (of GATA) has seen in 13 years, particularly due to the near extermination of many mining equities at the hand of Cartel ALGORITHMS. From yesterday’s GATA commentary:
This past weekend was the slowest one for The Café in 13 years. UNREAL =sales… gold is $1650 an ounce and the interest in the subject matter was the lowest in 149 months!
When the game ends, it will likely end VERY quickly, and that day is approaching VERY, VERY soon. When it does, if you have not PROTECTED YOURSELF with PHYSICAL GOLD, SILVER, and OTHER LIFE NECESSITIES, you may not be afforded another opportunity.