Gold World News Flash

John Roque - Europe is Uninvestable & Gold is the Antidote
Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil
Italy in Bond Freefall / Bond Yield surpasses 7.3% on 10 yr / Jefferson County Files for Chapter 11
The Price of Hope in the Mayhem of US Manufacturing
Grandich Enters Winners Circle
Goldman Sachs Unloads: "Ugly Day Everywhere"
Goldman Sachs Unloads: "Ugly Day Everywhere"
Gold Isn't All That Glitters
Gold Resource Corporation Reports Record Third Quarter Results; Increases Precious Metal Gold Equivalent Production by 88% Over Q2 2011
The Gold Price Met My Target Yesterday With a High of $1,802.73
Financial Times Deutschland Joins Hunt for Germany's Gold
Investors Ditch The Eurozone Amid Italian Debt Meltdown
Price Irregularities in the Silver Market
Educated Guessing Game
Gold Digests Latest Surge
Will Today Be The Day Gold Settles Above $1800, Stays There and Starts Its Ascent? It Wouldn’t Surprise Me
Italy Sparks Market Bloodbath: Financial Stocks Collapse
A Financial Nightmare For Italy: The Yield Curve For Italian Bonds Is Turning Upside Down
A Bull Market in Uncertainty
Short Interest Plunges Just In Time To Eliminate Natural "Covering" Bid, YTD Equity Fund Outflows Hit $112 Billion
Short Interest Plunges Just In Time To Eliminate Natural "Covering" Bid, YTD Equity Fund Outflows Hit $112 Billion
James Turk: Expect Cataclysmic Events in the Coming Weeks
2011 Subscriber Investment Summit: Northern Tiger Resources
Is It Gold Season?
Gold Daily and Silver Weekly Charts - Psycho Killers Qu'est-ce Que C'est?
MF Global, Repo-to-Maturity and Large Bank OBS exposures
Support Your Local Christmas Tree Grower
'Cataclysmic' events are crisis of socialism, not capitalism, Turk tells King
In The News Today
Europe is approaching the end game.

John Roque - Europe is Uninvestable & Gold is the Antidote

Posted: 09 Nov 2011 04:11 PM PST

With gold near $1,770, silver around $34 and stock markets around the world plunging yesterday, today King World News interviewed John Roque, Managing Director of WJB Capital Group out of New York. KWN wanted to get John's thoughts on where he sees opportunities on both the long and short side of the markets as well as gold. When asked about stocks, Roque responded, "First of all, Eric, I think it's a little ridiculous that the market believes a change in Italian leadership improves things in that part of the world. Also, I think it's important to note that the S&P failed at its downward sloping 200 day moving average which is in the 1,275 area."

This posting includes an audio/video/photo media file: Download Now

Gold Seeker Closing Report: Gold and Silver Fall With Stocks and Oil

Posted: 09 Nov 2011 04:00 PM PST

Gold fell to $1777.90 by a little after 5AM EST before it rose to see a $16.01 gain at $1799.61 by about 9AM EST, but it then fell back off for most of the rest of trade and ended near its late session low of $1764.11 with a loss of 0.81%. Silver fell to as low as $33.80 and ended with a loss of 2.77%.

Italy in Bond Freefall / Bond Yield surpasses 7.3% on 10 yr / Jefferson County Files for Chapter 11

Posted: 09 Nov 2011 03:10 PM PST

by Harvey Organ:

Good evening Ladies and Gentlemen:

Today was a wild day with the stock market falling by close to 400 points due to the continuing bond problems over in Italy. Late this evening, Jefferson county filed for chapter 11. I will be going over many stories on this front, plus the MF Global scandal but first let's head to the comex and see how things fared over there today.

The price of gold held relatively well despite the financial onslaught. Gold came within a whisker of 1800 dollars only to be repelled by many over by the criminal banking cartel. The price ended the comex session at $1790.90 for a loss of $7.50. Silver fell harder dropping 79 cents to $34.35. Warning to all: expect high volatility days like today for many trading days ahead.

The Price of Hope in the Mayhem of US Manufacturing

Posted: 09 Nov 2011 03:10 PM PST

By Wolf Richter www.testosteronepit.com

In what may be a precursor of a monumental shift, Toyota and Honda are planning to export U.S.-made vehicles to South Korea. Honda, which is already selling U.S.-made Accords in South Korea, is considering selling more U.S.-made cars there, CEO Takanobu Ito told reporters in Seoul today. And Toyota announced last week that it would sell U.S.-made Sienna minivans in South Korea. Apparently, the math changed, and now it's cheaper to produce cars in the US and ship them halfway across the world than it is to produce them in Japan.

Is the Fed's war on the dollar and on real wages finally "paying off" so that manufacturers can shift production to the US from other developed nations? And to what banana-republic levels will the dollar and real wages have to sink before US manufacturing is competitive with developing nations? There are already 49.1 million Americans who live in poverty, according to the supplemental Census test. At what wages will American workers be competitive with Chinese workers?

Back to the Japanese automakers. The strong yen is annihilating the cost competitiveness and profitability of manufacturing in Japan. Toyota's brutal quarterly earnings announcement yesterday attested to that: revenue down 5%, operating profit down 32%, and net profit down 18.5%. Through October, Toyota's US vehicle sales were down 8.8% from the same period in 2010, and Honda's were down 5.3%, while the US market was up 8.6%. The irony of their move to export from the US to Korea is that they both have gotten clobbered by Korean automaker Hyundai-Kia, whose combined US sales jumped 26.5% over the same period, after an already brilliant 2010.

Honda's and Toyota's problems have been blamed on the March 11 earthquake and subsequent production shortfalls. Their customers were said to be sitting on the sidelines, waiting for the supply to show up. But the disruptions have been resolved, and US plants have been working overtime for a while. Now hints are cropping up that their customers have bought other brands, particularly Hyundai and Kia, which offer significant price advantages.

Impatience may be one reason. But another reason may be that Toyota in particular has lost its aura of infallibility after a series of recalls, some of which were associated with cover ups. Another recall was issued today—for 550,000 vehicles. And now Toyota is perceived to be in the same quality ballpark as other automakers and is thus forced to compete on price against the Koreans.

And Europe is at the cusp of a nightmare. They've been trying to keep sales alive with big incentives. Ford succeeded in pushing up its unit sales by 5% for the quarter, but incurred $306 million in pretax losses due to rising input costs and, more importantly, huge sales incentives with which it tried to keep momentum alive. GM reported a similar story today. During the financial crisis, governments threw in their own incentives. But given the debt crisis, governments may have neither the appetite nor the wherewithal to subsidize the auto industry. So nose-bleed price competition will be the game plan—operating losses, cost reductions, and pressure on wages.

Germany may be losing its own struggle with competitiveness: BMW announced that it would shift more of its production out of Germany. Ten years ago, BMW produced 70% of its vehicles in Germany. Now it's down to 58%. The medium term goal, the company announced, is to bring this down to 50%. The winners: China, where it has been on a rampage (but.... China Puts The Screws To BMW, and BMW blinks), and you guessed it, the U.S. of A.

So how much more inflation do we need, and how much further do real wages and the dollar have to drop for U.S. workers to win this war of competitiveness? Clearly, they can hold their own against German and Japanese workers. But the threat comes from China and other developing nations—whose wages are still a fraction of those in the US, though they're rising rapidly. The Fed's stated policy of inflation and devaluation is a double-edged sword. It might make U.S. manufacturing more competitive, but it wreaks havoc on the real economy as wages don't keep up with inflation, and as the purchasing power of the middle class gets hammered year after year.

Even the inexplicable American consumer, the toughest creature out there, struggles with these prices as misery spreads into the middle class.... Inflation High On The Hog For The Holidays.

Wolf Richter www.testosteronepit.com

Grandich Enters Winners Circle

Posted: 09 Nov 2011 03:00 PM PST

The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! November 09, 2011 06:29 PM "Wall Street Whiz Kid" enters harness ownership after sneaking into Yonkers Raceway 40 years ago What started 40 years ago as a kid from the Bronx sneaking into Yonkers Raceway, is now a passion for Peter Grandich, the man Good Morning America called "The Wall Street Whiz Kid." "My father's favorite driver was hall-of-famer Cat Manzi," says Grandich, "and he used to put a 2-dollar ticket in my pocket each time Catman drove in a race." Forty years later, Peter invested in four harness horses, two of which are racing now, Dinner Guest and Orange Bigi, and became friends with Catman, eagerly wanting him to drive his horses. "I honored my father's memory by having Catman drive my horses and seeing him both at Cito's farm and at the track brings nothing but good memories of me and my father rooting the Catman on," Grand...

Goldman Sachs Unloads: "Ugly Day Everywhere"

Posted: 09 Nov 2011 10:50 AM PST

Even the squid has a bad day once in a while.

From Goldman Sachs

• Ugly day for stocks. As it was an ugly day everywhere. Europe getting worse at an accelerating rate, and it's not clear if there are any quick fixes available this time. Technicals might start getting worse too. Below 1220 in SPX and 1130 becomes the target (head and shoulders pattern). Though hedge funds were much better sellers on the day, long-only buying the dip rather aggressively, health care and energy names in particular. SPX drops 47 to close 1229 (-3.67%). The DOW drops 389 to close 11781 (-3.20%). The NASDAQ drops 106 to close 2622 (-3.88%).

• The VIX adds 8.68 to close 36.16.

• EURUSD sheds 2% today – that's as serious as downdrafts in the pair get. Post 2008, there have only been two days that have seen bigger losses. Flow was far from overwhelming. Of course EURO downside was in vogue (EURUSD and EURGBP particularly) but considering the magnitude of the goings-on in Europe, the mood is surprisingly sanguine. Elsewhere, CE3 under significant pressure as well. Basically turbo-charged EURO trades at this point. USDJPY finally below 78, but only modestly so. Still the least interesting cross in FX.

• Even an uncharacteristically poor 10y refunding auction couldn't keep Treasuries down today: the market bull flattened with 5s30s finishing the day 3.7bps lower. The overnight news of LCH increasing IM on Italian collateral by 5% set the tone, lending a bid to rates and pushing spreads wider across the curve by as much as 5bps. The price action provided little set up for the 10y auction, and the 24b in supply came 2bps cheap to the 1pm level. The reaction was muted however, and we saw real money and fast money buying the dip while we rallied into the close.

• In credit, the market opened significantly wider in spread and continued throughout the day. IG initially outperformed, but as we moved towards the afternoon session spreads moved wider on light volumes. HY was weak throughout the session, although coming into the close we started to see opportunistic buyers of risk.

• Oil tried to buck the trend of commodity weakness. Following some very bullish stats, WTI rallied a quick $3. But with stocks getting hammered, the decoupling didn't last long. Elsewhere, gold drops 1%, silver 2.5%.

• Tomorrow brings Germany, France, Norway and Sweden CPI; Italy IP; and the US Trade Balance. Fed Chairman Bernanke will speak in Texas and the BoE will announce Rates. The ECB will publish their November Monthly Report and the EC will release Economic Growth Forecasts.

Goldman Sachs Unloads: "Ugly Day Everywhere"

Posted: 09 Nov 2011 10:50 AM PST

Even the squid has a bad day once in a while.

From Goldman Sachs

• The VIX adds 8.68 to close 36.16.

Gold Isn't All That Glitters

Posted: 09 Nov 2011 10:50 AM PST

Michael O'Brian has learned to apply some philosophies as an avid art collector to his successful investment career: an investor should always be in it for the long term. O'Brian's principles have led him to look beyond gold to copper and some special projects for long-term gains. In this exclusive interview with The Gold Report, O'Brian, president of private investment firm Nairbo Investments, talks about why he's just as likely to sink his resources into a copper project as he is into gold.

Gold Resource Corporation Reports Record Third Quarter Results; Increases Precious Metal Gold Equivalent Production by 88% Over Q2 2011

Posted: 09 Nov 2011 10:47 AM PST

Gold Resource Corporation (AMEX: GORO) today announced record results for its third quarter ending September 30, 2011, including record profits and an increase of 88% in production of precious metal gold equivalent over the second quarter of 2011. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico. The Company has returned over $30 million to shareholders in monthly dividends since declaring commercial production July 1, 2010.

The Gold Price Met My Target Yesterday With a High of $1,802.73

Posted: 09 Nov 2011 10:32 AM PST

Gold Price Close Today : 1790.90
Change : (7.50) or -0.4%

Silver Price Close Today : 3434.8
Change : (78.9) cents or -2.2%

Gold Silver Ratio Today : 52.140
Change : 0.957 or 1.9%

Silver Gold Ratio Today : 0.01918
Change : -0.000359 or -1.8%

Platinum Price Close Today : 1628.40
Change : -33.70 or -2.0%

Palladium Price Close Today : 645.00
Change : -27.35 or -4.1%

S&P 500 : 1,229.10
Change : -46.82 or -3.7%

Dow In GOLD$ : $135.98
Change : $ (3.89) or -2.8%

Dow in GOLD oz : 6.578
Change : -0.188 or -2.8%

Dow in SILVER oz : 342.99
Change : -3.38 or -1.0%

Dow Industrial : 11,780.94
Change : -389.24 or -3.2%

US Dollar Index : 77.89
Change : 1.318 or 1.7%

The GOLD PRICE has had a week to fulfill my suspicions that a rally was coming, and during that time fulfilled my $1,800 target -- high yesterday was $1,802.73, high today was $1,799.50. Comex GOLD PRICE today lost $7.50 to $1,790.90.

Now we have reached Fish or Cut Bait time, but the GOLD PRICE fall today still doesn't make perfectly clear its intentions. If it were aiming to cut through $1,800, then it might just pull back and squat down before it made the dash, and that might explain today. On the other hand, if it falls through $1,750 tomorrow and moves toward $1,705, gold's liable to have vertigo problems, including stumbling and falling. Only a close below $1,650 would invite serious worry and nail-biting. Of course, it's hard, hard to picture how a bank solvency crisis in Europe would drive gold DOWN, unless the whole world is dumber than Ben Bernanke.

I'm turning ugly, so I better turn to silver.

With less enthusiasm than gold, the SILVER PRICE rallied in the last week, but today with a 3382c low gave up all those gains, falling today from a 3507c high to close Comex at 3434.8c, down 78.9c (2.24%).

Not much to argue about here. Should the SILVER PRICE fall through that trap door over the elevator shaft at 3400c, next place it would land about the 20 DMA at 3325c.

I wrote last Thursday that the market was beginning to persuade me that bottoms in silver and gold had already occurred. By failing to pass above $1,800, gold has left that question open. It will remain open until gold either closes over $1,800, or below $1,700.

I'm telling y'all, long as the world's racing this way downhill into the ditch, y'all better start working on some marketable skills like gardening, milking, herding goats, or digging ditches. That, or give up eating.

My son Justin and I returned yesterday from a four day class in timber framing at Camp McDowell down in Alabama. The Alabama Folk School there sponsored several Old Time music classes -- guitar, mandolin, banjo, harmonica -- and there were homesteading and timber framing classes.

Now I know and openly admit that I'm nothing more than a natural born fool from Tennessee, but it ought to tell y'all how deep is the trouble that you and the whole world are in when nobody but a natural born fool from Tennessee can tell that all the bogus fixes the High and Mighty are pushing won't work any better than a Zippo in a hurricane.

Last week and week before everybody was just a-buying stocks like they had the future written out in advance, all based on Europe's announcement they had a "fix." I told y'all then, that was as good as it gets, and since then it's only gotten worse. Now Italy is trying hard not to look like Greece, and Silvio Baloney is about to lose his grip on power. I'm here to tell you again, they ain't fixed nothing, and ain't going to, because the only course that truly will fix things is a DEBT JUBILEE, writing all that debt clean off, and the bankers won't let them do that. Oh, they will eventually, but not until they made the whole world suffer and sweat blood.

In the week I've been away (and a little more) the Dow Jones Industrial Average has lost all its November gains. Whoops -- they were just so slippery we couldn't hold on to 'em!

Today was worse. Dow lost 389.24 -- 3.2% -- to close at 11,780.94. (S&P500 closed down 46.82 or 3.67% at 1,2298.10.) Today's colossal drop took the Dow below 11,850 support and WAAAY below its 200 day moving average at 11,975. Woe is stocks! Hard to paint any sort of Smiley Face over this.

'Tisn't yet clear whether the Dow will push one more lap (even yet) to 12,400 before it collapses, or it will merely collapse immediately. How can you tell? A close below 11,600 turns it down.

Today the dollar index showed how much it appreciated the European troubles by rising a gargantuan 131.8 basis points (1.70%) to 77.892.

The eurro has left behind one of the sorriest, nastiest looking charts you've ever thrown an eye over. Broke down out of the trading range in September, bottomed at 1.3164 in October, rose with great gaps to 1.4247 when the "fix" announcement was made, then gapped down again and fell back out of the trading range. Oh, did I forget to mention that the euro left behind a clear Island Reversal pattern? That's a Kiss of Death with giant fangs and coral snake venom on its lips. If y'all are planning a European vacation, wait a while to buy your euros. You can probably get them for 1.2000.

I think the Nice Government Men in Japan have broken the yen for a while. Closed today at 128.53c/Y100 (Y77.8/$), and shouldn't make it through 129c.

SPECIAL OFFER.

I bought some one troy ounce .999 fine silver rounds that have passed through a housefire. They are not melted, but range from altogether black colored to only a few black spots. With spot silver at $33.90, I will sell these 513 one troy ounce silver rounds at a dollar less than spot, namely, $32.90 each.

Before you buy, please understand EVERY SALE IS FINAL. Once you buy them, they are yours. I will BUY them back (at current spot less 10%), but will not take them back for exchange or replacement because I am telling you on the front end exactly what they are, so no later waffling, mind-changing, or "I forgot to tell Mama about this and she got mad when she found out and locked me in the garage." You send me an email order, and you bought them, period.

I have 513 one ounce .999 fine blackened silver rounds to sell at $32.90, and will sell them in minimum lots of One hundred (100) pieces. You can order lots in multiples of 100, or make an offer for the whole pile of 513.

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail. Ordering Instructions:

1. You may order by e-mail only to . Your email MUST include your complete name, address, and phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

2. Orders are on a first-come, first-served basis until supply is exhausted.

3. "First-come, first-served" means that we will enter the orders in the order that we receive them by email.

4. If your order is filled , we will email you a confirmation. If you do not receive a confirmation, you order was not filled.

5. You will need to send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours after we notify you that we entered your order.

6. We will allow fourteen (14) days for personal checks to clear before we ship. If your hurry is greater than that, you can send a bank wire. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 2011, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Financial Times Deutschland Joins Hunt for Germany's Gold

Posted: 09 Nov 2011 10:19 AM PST

by Chris Powell, GATA:

Dear Friend of GATA and Gold:

The long clamor about the German gold reserves by GATA and particularly by our friends, the German journalist Lars Schall and the German market analyst Dimitri Speck, this week caught the attention of the German edition of the Financial Times, which published a story headlined "Speculation and Rumors: The Hunt for the Treasure of the Bundesbank."

The Financial Times Deutschland confirms, as GATA has reported, that most of the German gold is stored outside the country, partly for international security reasons but more so now for ease of trading and general subservience to the United States. The FTD story is notable mainly for extracting from the German central bank, the Bundesbank, a statement that no German gold is being leased at the moment.

Read More @ GATA.org

Investors Ditch The Eurozone Amid Italian Debt Meltdown

Posted: 09 Nov 2011 10:17 AM PST

Investor confidence in the eurozone collapsed on Wednesday, propelling Italy to the brink of a bail-out and pushing Spanish and French borrowing costs to record levels.

by Louise Armitstead, Telegraph.co.uk:

The yields on Italian bonds soared through the crucial 7pc level effectively shutting out Europe's third biggest economy from capital market funding.

Rome was left floundering as its sacrifice of Prime Minister Silvio Berlusconi failed to reassure markets and created even greater confusion.

Analysts warned that Italy was now a "lost cause" and "staring bankruptcy in the eye" – while Europe lacks the mechanism or firepower to support it.

Read More @ Telegraph.co.uk

Price Irregularities in the Silver Market

Posted: 09 Nov 2011 10:16 AM PST

Intra-day averages clearly show market intervention. You've seen it before, right? Suddenly, the price of gold or silver drops like a rock. For no apparent reason a chunk of its value is lost within minutes. Read More...

Educated Guessing Game

Posted: 09 Nov 2011 10:13 AM PST

Bill Bonner View the original article. November 09, 2011 10:32 AM Yesterday, Silvio Berlusconi said he will leave government…once the legislature has agreed on an austerity program. Too bad. We'll miss "The Cavalier." Once, in Rome, we heard him speak to a crowd. We didn't understand a word of what he was saying. But he said it well. He was at ease…friendly…joking…enjoying himself. And now what? The poor man will be out of politics. No more will he get to work with the great men of finance, trying to solve the historic problems of the day. He'll have only his bunga-bunga parties with plenty of alcohol, music and beautiful young women. Poor fellow. Our guess is that the great men of finance won't be able to solve Europe's debt problems. At least, not without a few blow-ups. And the European Union will probably end up less united than ever. (Gold is trading over $1,800 this morning…looks like investors are worried too.) Until recently, both economics a...

Gold Digests Latest Surge

Posted: 09 Nov 2011 10:13 AM PST

courtesy of DailyFX.com November 09, 2011 08:28 AM Daily Bars Prepared by Jamie Saettele, CMT Gold has broken through what was previously viewed as a corrective 3 wave channel from the low. Yes, it is possible that the rally from the September low does compose a corrective advance but I am tired of fighting the tape. Former resistance at 1752 and the steep trendline that extends off of the October and November 1 lows are support. Bulls are firmly in control above 1680. Latest Video Other TA Articles...

Will Today Be The Day Gold Settles Above $1800, Stays There and Starts Its Ascent? It Wouldn’t Surprise Me

Posted: 09 Nov 2011 10:10 AM PST

by David Schectman, MilesFranklin.com:

This is the second day in a row that Ranting Andy has sent me TWO essays for the newsletter. Hey, Andy – ya gotta slow down! Andy, don't ya ever sleep?

But – his essays keep getting better and better. Starting in a week or two, Andy will present his "Rants" in a separate afternoon edition of the Miles Franklin Report, as a companion piece to this newsletter. We hope you will read BOTH. The truth is, there is so much to write about now, and newsworthy events seem to be speeding up. From China to Iran to Greece and Italy – from the euro to the dollar – the winds of change are bearing down on us. It's hard to keep up. In the early 90s, I wrote a quarterly newsletter. In the late 90s I upped it to a monthly, and eight years ago it became a weekly. I think it was about four or five years ago that it finally became a daily, and as soon as our editor gets back from her well-earned vacation, next week, we will be going to a two-a-day format. Don't write me and say "it's over kill." It's not. If you want to be on top of what is happening, we are offering you the information that you need. Not once, but twice a day. Andy's Rants are so unique that I decided they should be a stand-alone newsletter, not an insert into my daily. I hope you agree.

Read More @ MilesFranklin.com

Italy Sparks Market Bloodbath: Financial Stocks Collapse

Posted: 09 Nov 2011 10:06 AM PST

from ZeroHedge:

So much for the US decoupling. Following 5 days of persistent refusals to deal with reality, the real world finally came back with a bang, and while the overall market tumbled the most in two months, it is really financial stocks that took the brunt of today's beating. As the chart below shows, the XLF has literally collapsed with most major banks on the ropes, and the broker dealer index down 6.45% the most since August 10. The reason? Italy of course, and the fear that once the country is forced to write down its debt, the bank failures will proceed in waves: first Italian banks, then French, and then everyone else, especially those that have already been in the market's crosshairs for their exposure. And if today was ugly, tomorrow promises to be an absolute bloodbath with Italy deciding to proceed with the issuance of €5 billion in 1 year Bills into what may well be a bidless market.

Read More @ ZeroHedge.com

A Financial Nightmare For Italy: The Yield Curve For Italian Bonds Is Turning Upside Down

Posted: 09 Nov 2011 10:03 AM PST

from The Economic Collapse Blog:

What we are all watching unfold right now is a complete and total financial nightmare for Italy. Italian bond yields are soaring to incredibly dangerous levels, and now the yield curve for Italian bonds is turning upside down. So what does that mean? Normally, government debt securities that have a longer maturity pay a higher interest rate. There is typically more risk when you hold a bond for an extended period of time, so investors normally demand a higher return for holding debt over longer time periods. But when investors feel as though a major economic downturn or a substantial financial crisis is coming, the yield on short-term bonds will often rise above the yield for long-term bonds. This happened to Greece, to Ireland and to Portugal and all three of them ended up needing bailouts. Now it is happening to Italy and Spain may follow shortly, but the EU cannot afford to bail out either of them. An inverted yield curve is a major red flag. Unfortunately, there does not seem to be much hope that there is going to be a solution to this European debt crisis any time soon.

A Bull Market in Uncertainty

Posted: 09 Nov 2011 10:00 AM PST

If you meet the Buddha, kill him.

— Linji

Markets in the US and Europe closed higher yesterday. The Dow ended up about 100 points. Newswires — forever quick to publish and always slow to think — claimed investors were cheering the resignation announcement from Silvio Berlusconi. The late afternoon rally was a "roaring approval" of the Italian prime minister's move, they reported.

Since then, the "roaring approval" softened to an uneasy regret…followed by a quick rethink…then a mild panic…and, as of a few minutes ago, a mad dash for the door.

Renewed uncertainty about Italy's ability to roll over its debt sent yields on the failing country's 10-year bonds bolting past 7% this morning — a new euro-era high. Most European indexes slid at least 2% overnight.

Not to be outdone, measures in the US also gave up yesterday's cheerful gains…and then plenty more. Last we checked the Dow had slumped about 3%, or roughly 400 points. The S&P 500 and Nasdaq were lower by 3.3% and 3.5% respectively.

Gold, too, is back down to $1,770, having lost about $12 overnight after briefly kissing $1,800 per ounce.

One thing that IS up is the CBOE Market Volatility Index, or VIX. "Wall Street's Fear Gauge," as it's sometimes referred to, spiked above 32 earlier today. It's a bull market in uncertainty…and with good reason.

European crises…debt ceiling brinksmanship…sovereign defaults and government overthrows…open source warfare and old style battlegrounds…occupiers…tea partiers…failed recoveries and flaccid economic growth…

It's been a big year, Fellow Reckoner. And it ain't over yet!

To say investors have had their work cut out for them over the past twelve months would be somewhat of an enthusiastic understatement. From zenith to nadir, peak to trough, the Dow Jones Industrial Average has swung roughly 17% during the last year, from an April 29 high of 12,810 to an October 3 low of 10,655. That's a difference of 2,155 points…roughly the same reading the entire index registered back on New Year's Eve Eve, 1988.

"Discovering, discovering, discovering," we remarked last week. "That's what the market is always doing."

And thankfully, it will never stop. Not if it is left to its own searching, wandering, peripatetic nature. In this way, the market is a bit like the contemplative Buddhist, scouting around deep in the cave of his own mind. We can almost hear his innermost meditations…

"If you meet the perfect price, kill it."

Why kill the perfect price, you ask? Because it's an illusion, of course, a decoy on the path to pure market nirvana.

Prices change from moment to moment…transaction to transaction. And, because value is subjective, because it does not exist, intrinsically, within the goods and services we trade, it also changes from person to person, depending on their individual desires and needs at any given time. There is no perfect, eternal and everlasting price for all things…or even for any one thing.

"Value is not intrinsic, it is not in things," observed Ludwig von Mises in Human Action. "It is within us; it is the way in which man reacts to the conditions of his environment."

In this way, Mr. Market's job is not an easy one. He must search endlessly for something he knows he will never find. He must seek that which does not exist beyond the moment. His work, therefore, is never done. The second he arrives at an answer, it changes before his very eyes, vanishes behind a cloud of smoke, morphs into something new and entirely unpredictable.

That's what makes trading markets so difficult…and so exciting. It's also what makes trying to control, cajole and contort them to one's own whims and desires such a laughably futile endeavor. And it's what makes watching the feds' attempts to do exactly that so much fun.

The feds are always trying to force and control the markets, which really means forcing and controlling the human participants whom those markets represent. They think they know what prices ought to be, forever and ever, amen. Such is their immeasurable arrogance. The price of healthcare is too high, they say, the price of whisky too low. So they give the former away for "free" and levy taxes on the latter, trying to manipulate the real world prices to fit with their bloated opinion of what constitutes a better reality for people they've never met, living under circumstances they could never hope to understand.

But here's what they forget: though prices are subject to (and indeed defined by) opinion, reality is not. Consequently, they can't really "give away" free healthcare…or free education…or free anything. And so they don't. Instead, they steal the funds to pay for it from other people — present and future — to make it appear free. That, or they borrow it from foreigners. (Or, as is more commonly the case, a combination of both.) Either way, the real world cost hasn't gone anywhere…except now it exists as an interest-accruing debt, growing larger by the day. In this way, free tends to become very expensive very quickly.

You can see the skyrocketing price of free goodies all over the world. Take Europe, for example…

Over in the eurozone — as elsewhere — big thinkers at the central banks assume they can fix the price of everything. How do they do that? They fix the price of money itself by controlling the supply, outlawing competition and by finicking interest rates (the cost of borrowing). They think they know what a dollar — or a euro…yen…peso, etc. — ought to be worth and precisely how many of them ought to be in circulation to satisfy the myriad needs of its millions of individual users at any one time.

In 1999, the euro politicos thought they'd go one step further and throw a blanket over the whole of the European continent. No need for drachmas or liras or francs, they said. We'll issue a new, Esperanto currency, one that can speak all of your languages, one that knows your every need and desire and that can fulfill them all. What had previously been an impossible task for the central banks of individual nations soon became, for the European Central Bank, a monumentally impossible task. Some 322 million Europeans use the moribund currency daily. Add to that 175 million people worldwide — including 150 million people in Africa — who's own various currencies are pegged to the euro.

How were the eurofeds supposed to know what was best for half a billion different people, spread over dozens of countries around the globe? Perhaps they never stopped to ponder the question. Or maybe they did…but ignored the obvious answer. Most folk have a hard enough time working out what's best for themselves…never mind anyone else.

So here we are, little more than a decade into the experiment and we see how things are going. Markets are daily discovering…discovering more of what they don't like. And politicians are daily impeding…impeding the communication lines, fogging up the signals, breaking the market's concentration and generally damning the whole discovery process to hell.

Hey, that's no way to achieve market nirvana…dude.

Joel Bowman
for The Daily Reckoning

A Bull Market in Uncertainty originally appeared in the Daily Reckoning. The Daily Reckoning provides over 400,000 readers economic news, market analysis, and contrarian investment ideas.

Short Interest Plunges Just In Time To Eliminate Natural "Covering" Bid, YTD Equity Fund Outflows Hit $112 Billion

Posted: 09 Nov 2011 09:58 AM PST

The just released short interest update from the NYSE tells us two things: as expected, the bulk of the rally from the early October lows was a function of short covering, as nearly 2 billion shares short were covered in the past month, a multi-year record, bringing short interest from equal to the March 2009 market lows at over 16 billion shares to just over 14 billion by the end of October, just as the S&P added almost 200 points. Indictively, it tells us that in this low liquidity and volume enrivonment, the covering (forced or otherwise) of each billion shares of stock on the NYSE is roughly equivalent to 100 S&P points. More importantly, now that the market has started its tumble, there are no weak hands left to cover and provide the natural bid buffer when the market goes bidless. Those who are short now, are short for good, and will likely cover far, far lower. Which leaves the only open question of what the EURUSD net shorts will do. However, with the EUR at one month lows, we are fiarly confident that any potential covering there is over, and only more shorts are being added.

And in other unpleasant news, the equity exodus continues unabated as equity mutual funds are running on "dry powder" fumes: in the week ended November 2, another $3.4 billion in cash was redeemed from domestic equity funds, bringing the total for 2011 to ($112) billion and the last two year total to $210 billion rotated out of stocks and into fixed income and/or precious metals. Excluding an irrelevant blip in August, this is the 29th consecutive weekly outflow from stock funds. Ironically, in continuing to do nothing to restore investor confidence, the SEC is doing the best job possible to actually fix this market - it is after all precipitating its terminal collapse and much needed reset.

Soon there will be nobody trading at all, and 1 ES block will move the S&P by 10% or more, confirming that during her tenure, Mary Schapiro singlehandedly destroyed what is left of the US equity market (but at least got a few cushy general counsel jobs for her employees at several HFT firms in Chicago and New York).

Short Interest Plunges Just In Time To Eliminate Natural "Covering" Bid, YTD Equity Fund Outflows Hit $112 Billion

Posted: 09 Nov 2011 09:58 AM PST

James Turk: Expect Cataclysmic Events in the Coming Weeks

Posted: 09 Nov 2011 09:56 AM PST

from King World News:

With stocks plunging the dollar rallying and the situation in Italy spinning out of control, today King World News interviewed James Turk out of Spain to get his take on what is happening. When asked about Italy and if we should expect more bank failures, Turk replied, "We had a major development here in Europe today, Eric. Yields on the ten year Italian bond soared to over 7%. The 7% hurdle is considered critical because once Greece and Ireland went over 7%, they turned to the EU for a bail out. So the thinking now is that Italy needs a bail out too, but here's the problem. Italy has two trillion euros of debt. That's greater than the total amount of debt owned by Greece, Ireland, Portugal and Spain combined."

James Turk continues: Read More @ KingWorldNews.com

2011 Subscriber Investment Summit: Northern Tiger Resources

Posted: 09 Nov 2011 09:38 AM PST

Northern Tiger (TSX-V:NTR) President & CEO Greg Hayes gives the company presentation at the 2011 Subscriber Investment Summit. Northern Tiger Resources Inc. is a Canadian-based resource exploration company focused on gold and copper exploration in the Yukon.

Is It Gold Season?

Posted: 09 Nov 2011 08:42 AM PST

Author: Kevin Brekke Synopsis: Even though the price of gold has been slowly nudging higher, Jeff Clark makes a good case that it's still a good time to buy both the metal and select gold stocks. Also today: a sobering look at resource misallocation in college education. Dear Reader, The consequences of misallocated capital is an encore subject here at the Daily Dispatch. It's a topic that often centers on resources wrongly dedicated to a project of dubious merit, like the cement used to build a bridge to nowhere. However, the resources involved – squandered, really – also include such things as time lost at building a career with limited or obsolete prospects. More than a few times we have poked fun at those who pursue history or art degrees, just two of the many cogs in the diploma-manufacturing departments of the "soft" or social sciences. To be fair, though, we...

Gold Daily and Silver Weekly Charts - Psycho Killers Qu'est-ce Que C'est?

Posted: 09 Nov 2011 08:20 AM PST

This posting includes an audio/video/photo media file: Download Now

MF Global, Repo-to-Maturity and Large Bank OBS exposures

Posted: 09 Nov 2011 08:18 AM PST

There have been a number of good analyses of the MF Global collapse and the role of "repo-to-maturity" trades in the failure. See "MF Global and Repo Accounting," which also has links to Felix Salmon and several other good posts. Read Yves Smith's comment on Lehman Brothers from last March as well.

But one of the things that most people seem to miss in this fiasco is the role of off-balance-sheet or OBS accounting in making the failure of MF Global a reality and, in particular, what it implies for other, larger banks. Many observers say that the FASB erred by not "fixing" the OBS issue via disclosure, but in fact we need to eliminate OBS treatment of all assets, period. Indeed, the MF Global failure suggests that the US and EU banking systems may be facing a far larger problem than even the most bearish analysts suspect.

First let's ponder a recent report by the International Swap Dealers Association or ISDA. A post on RiskCenter summarizes the findings:

"The counterparty credit risk exposure of 12 US bank holding companies and international banking companies to monoline insurers has led to some $54 billion in write-downs by the banks since 2007, according to a new analysis by the International Swaps and Derivatives Association, Inc. (ISDA). ISDA conducted the study as part of its examination into the losses incurred in the US banking system due to counterparty defaults on OTC derivatives. An earlier paper on the subject, based on data from the US Office of the Comptroller of the Currency (OCC), showed such losses for US banks amounted to only $2.7 billion from 2007 through the first quarter of 2011. After further investigation, it became apparent that the transactions involving subprime mortgage risk taken in synthetic form (via derivatives) were booked in firms outside the US banking system."

What the ISDA report suggests, oddly enough, is that the large banks which comprise the most important members of the derivatives markets and ISDA both have been under-reporting their losses to monoline insurers by more than 20x in their SEC filings. But the report also confirms in the last sentence the key factoid that should make the blood of Barack Obama, Jamie Dimon and FOMC members run cold, namely that the banks were hiding these losses on RMBS from investors and regulators in OBS vehicles. This is essentially systematic securities fraud, enabled and facilitated by the FASB and ISDA. By relying solely on GAAP accounting, the OCC, Fed and other regulators have left themselves completely in the dark regarding large bank OBS exposures.

So now we come to the MF Global failure and Jon "Superman" Corzine, who followed the familiar pattern of taking a financial and legal template developed in Washington and specifically the Treasury market and extending the model into inferior assets. This is precisely the same behavioral pathology, to my friends Barry Ritholtz and Joe Nocera, which Wall Street used in the subprime crisis. Washington started the game rolling and Wall Street made it better. As Flo and Eddie sang with Frank Zappa and the Mothers at the Fillmore East in June 1971, "so happy together."

In a "repo to maturity," banks are permitted to match fund Treasury securities and then lend the securities out. The bonds are not shown on the books of the bank or dealer, because the servile functionaries at the FASB have blessed the repo as a risk-shifting transaction. In economic terms nothing could be further from the truth, but reality has never stopped the FASB from embracing acts of global idiocy like fair value accounting and OBS treatment for RMBS securitizations.

The repo-to-maturity arrangement works with Treasury paper because the Fed stands willing to buy any securities issued by the US government at par, thus the repo has no risk. The problem comes, however, when the financial institution starts to think that it can do these same, repo-to-maturity trades with paper other than Treasury collateral. This is why we need to eliminate the OBS distinction in the US immediately.

What Corzine apparently did at MF Global was to put on repo-to-maturity trades on with non-US, EU government debt. While the post-WWII construct created by the US makes all debt issued by members of the OECD "zero risk" under the Basel accord, this reality is now disintegrating. The sovereigns are now the inferior credits in the global markets, but many large US and EU banks are loaded to the gills with this debt. Unfortunately Corzine did not get the memo. Remember, the OECD is a Cold War construct of the US meant to help defeat the Soviet Union. It has nothing to do with assessing credit risk or even economic capacity to service debt.

So when people ask me about the exposure of US banks to EU governments, the answer is that we do not know because of the FASB and the willingness of US bank regulators to look the other way by accepting GAAP disclosure as sufficient. When JPM, GS and MS tell us that their EU exposure is limited, what they are really saying is that their GAAP disclosed exposures are small. The real risk exposure is, in my view, far larger.

If we could see all of the OBS exposures of the top 10 US banks to EU government via deceptive if for now legal canards such as repo-to-maturity, my sense is that the difference between the reported risk of US banks on EU government debt and the actual risk exposures would be the same as the gap between the OCC's view of bank risk on monoline insurers and the reality just confirmed by ISDA. Thanks guys.

And just to show we are paying attention, ISDA is wrong to criticize Gretchen Morgenson's characterization of the MF Global collapse in last Sunday's New York Times. Cash is cash, but repo-to-maturity is a derivative, just like any trade that involves an ISDA agreement.

So here is the question Morgenson should ask the top bank CEOs: How much exposure to EU government debt does you bank have OBS? I suspect that the reason for the great performance in financials today is that people in the markets have reached the same conclusion. So, to me, we should hit the bid for US large cap financials in the AM regardless of what is happening in the EU tomorrow – or not.

Support Your Local Christmas Tree Grower

Posted: 09 Nov 2011 07:44 AM PST

Addison Wiggin – November 9, 2011

Beware the Christmas Tree Tax: Funding government through "new taxes and weird fees" is just getting started, we fear…
Oil jumps on Iran fears: Financial Times echoes our own forecast… but does so with a straight face…
Italy reaches "point of no return"… Amoss on what to expect now that Eurocrats have a "gun to their head"… $3,000 gold next?… say it ain't so…
Santa falls victim to the spending crisis on Long Island… the horror of it all…
Readers offer their own hollow-book hideaway guidance… kvetch about hardworking Colombian actresses…demand more something for nothing than they're currently getting… and more

Until this morning, we had no idea the Christmas tree industry in America had such a powerful lobby. But it does… and it's going to cost you.

Effective this year, anyone who sells more than 500 Christmas trees in a year will have to fork over 15 cents per tree to the Department of Agriculture — a cost that will surely be passed on to you, the customer.

The revenue won't be going into the general fund. According to a notice yesterday in the Federal Register, the money will go toward a "program of promotion, research, evaluation and information designed to strengthen the Christmas tree industry's position in the marketplace."

Uh… shouldn't that be the province of tree growers in the "Christmas tree industry"? Maybe we've entirely misread the Christmas Tree Industry clause in the Constitution.

Wait, there isn't one? Hmmmn…

Well then, the implication is obvious: Without such a federal program, the Christmas tree industry would surely die, like, well, the dried-out tree you'll be taking down sometime after the new year.

Again, we had no idea.

Chalk the Christmas tree fine up to another in our laundry list of "new taxes and weird fees" that are bound to grow exponentially as the spending crisis unfolds. We've collected a few more entertaining ones in recent days…

Chicago Mayor Rahm Emanuel's budget for next year will double or even triple the fines for a host of offenses — for everything from driving with a suspended license ($1,000) to allowing your weeds to exceed 10 inches high (as much as $1,200). The latter is clearly the greater threat to society…
Riverside County, Calif. — a poster child for the housing bust, hurting badly for property tax revenue — is looking to charge jail inmates for their upkeep. That's $143 a day. Presumably, you'd have to fork it over even if the charges were dropped and your case never got to trial…

Farfetched? How about this revenue enhancer: Under a state supreme court ruling a few weeks ago, folks in Massachusetts who successfully fight a moving violation still have to pay court costs.

Thus did a gentleman named Ralph Sullivan avoid a $100 ticket for failure to stay in his lane… but he had to fork over $70 in "processing fees" even though the court found he had, in fact, stayed in his lane.

And finally, a bill being introduced today in the U.S. Senate would authorize states to collect sales tax on online purchases. How those outlaws who run web businesses have gotten away without paying taxes for this long, we don't know.

That said, senators are still planning to let petty entrepreneurs off the hook. If your annual sales didn't exceed $500,000 on the Web, you would not be considered one of the rich plump enough to eat. So you still wouldn't have to collect the sales tax.

We've been amusing ourselves with "new taxes and weird fees" for six about months now. At some point, though, we suspect the pettiness is going to start to get annoying.

"Iran Worries Spark Fears of $200-a-Barrel Oil," reads a headline at the Financial Times that could have been ripped right from our own Outstanding Investments promotion.

Heh.

Funny how public perception works. We remember a similar promotion for Outstanding Investments forecasting $40 oil about five years ago earned us a barrelful of laughs… and jeers. Back then we were "alarmists"… "doom-and-gloomers"… what of the Financial Times today?

"The war of words between Washington and Iran about Tehran's nuclear program is boosting oil prices," says the salmon-colored rag. "The worry? That Israel launches a surprise attack and Iran retaliates, shutting down the Strait of Hormuz, the gateway for Middle East oil."

"Hormuz," explains Byron King in his New War scenario, "is the tight waterway that connects the Persian Gulf to the Mediterranean. Over 17 million barrels of oil have to pass through Hormuz every day. That's 40% of all the oil shipped in the world."

Click on the map to learn about the three Flashpoints in Byron King's New War scenario

At last check, the bid on a barrel of West Texas Intermediate is $95.15. But that's simply the going price at the terminal in Cushing, Okla. Most of the rest of the world pays the Brent crude price — which right now is a much stiffer $112.82.

There's still time for you to review Byron's New War scenario before it becomes as stale as yesterday's newspaper.

Looks like another "risk off" day, thanks to Italy. The yield on a 10-year Italian government bond has crested 7% — which, as we explained Monday, is pretty much the threshold beyond which Italy can no longer keep rolling over its debt payments.

According to a report out from Barclay's this morning, "Italy is now mathematically beyond point of no return."

Added a report from Deutsche Bank: "It's not inconceivable that we could be in full crisis mode by the end of this week."

Let's tote up the impact…

As of this writing, the major U.S. indexes are down 2.5% or more. The Dow is down 300
European indexes closed down more than 2%
The euro is down big, to $1.357. The dollar index is up to a one-month high of 77.8
Treasuries are up big, the yield on a 10-year note sinking below 2%.

The trigger: An independent clearinghouse group called LCH Clearnet doubled margin requirements on Italian government bonds.

"Since leveraged speculators set the marginal price on these bonds," explains our short strategist Dan Amoss, "their desperate selling to raise cash has caused prices to crash and yields to spike."

"This crash will effectively put a gun to the head of the European Central Bank to accelerate the pace of Italian bond purchases. Thus far, the ECB hasn't wanted to send the message that it's going to excuse the Italian government from making difficult budget cuts. But in a crashing bond market, it will naturally put those 'moral hazard' concerns aside."

"The EU faces a choice," says Dan: "default and deal with the fallout on the banking system, or have the ECB print trillions of euros to monetize PIIGS debt. Neither the Italian public nor the Greek public is going to support any government that imposes real austerity measures. This is what the financial markets are coming to understand."

"Next, the markets will start anticipating much more money printing from the ECB, because it will have no choice, as it's the only entity able to keep the Italian bond market from crashing."

Amid the eurodrama, gold is playing its role nicely, holding firm at $1,794. Silver's demonstrating resilience at $34.65. And a respectable mainstream economist is calling for — what's this? — $3,000 gold. (Again, our forecast of $2,000 in 2006… well, you know the story as well as we do.)

"With the implosion of Italy," says the University of Maryland's Peter Morici, "Portugal and Spain would not be far behind, and French debt will come under closer scrutiny. At that point, investors will stampede from the euro-denominated debt of most governments, but with rates so low on U.S. Treasuries and too little Japanese and Chinese sovereign debt in open circulation, gold would become the asset of choice."

"Moreover, all this could easily unfold as the supercommittee in the U.S. Congress races toward a stalemate on an acceptable combination of tax increases and spending cuts. With such dysfunction in Washington, investors would realize that U.S. debt, though still manageable, is racing to an unsustainable level mighty fast, and would start fleeing Treasuries."

"At that point, nothing is left but gold."

We sat opposite Mr. Morici during a discussion of the GM bailouts one afternoon on a local NPR radio program here in Baltimore. He seemed a nice enough chap, but we were warned by other guests that his opinion — that of opposing the bailout — couldn't be trusted because he had corporate clients.

Heh… right.

[Ed. Note: Gold at $3,000 would mean Italy hit the fan... and the supercommittee met with dubious results. Never happen, right? Just in case, you might want to check out this offer for a 24-karat Gold Buffalo and 10 Silver Eagles. We're effectively giving them away... but not for long. Especially at this price.]

From the "times are tough all over" file, we see that Suffolk County, New York, is so broke that Santa's sleigh will bypass one of Long Island's most familiar tourist spots.

For the last nine years, Santa has appeared at the St. James General Store — which was once a real general store but now sells trinkets on behalf of the Suffolk County government.

No more. The $660 the county ordinarily pays 83-year-old David McKell to play Santa was among the line items chopped this year.

"The alternative is always there," suggests County Executive Mark Smith, "for the General Store to find a volunteer willing to play Santa for the kids."

St. James General Store: Still picturesque, but the old man had to go…

We're not surprised Santa has to go. Suffolk County isn't picking up leaves in the fall anymore, after all. That we learned on Monday while examining the fearsome "Occupy the Hamptons" movement.

Strange days… we expect many more. Prepare here.

"A quick word just to counter that prudish reader's comment in yesterday's 5," a reader writes. "I must say that seeing the gorgeous Ms. Vergara in Monday's issue gave me a lift in more ways than one. You brightened my morning here in Asia, which is when I receive your newsletter."

"Don't change a single thing — The 5 is perfect as it is."

"Sorry," writes a reader who clearly disagrees, "but I was also taken back by the picture suddenly appearing in your otherwise professional appearing publication."

"It has nothing to do with the subject matter. It made me think twice about your Buffalo offer, which until then I was considering. Your flippant answer to the other writer and printing of the offensive gentleman's letter shocked me."

"Don't bother changing," adds one more, "to fit into some neat little world of these people who complain. If you make The 5 acceptable to all people, it will no longer be worth reading."

The 5: Now, we're confused… but since we're in self-improvement mode, let's get this guy out of the way too:

"I just read my first 5 Min. Forecast and learned nothing that I did not already know."

"My only desire is for a stock picker who gets it right 90% of the time and with stocks in the $35 or less range and gets the word out to subscribers before the Street gets to them. Why else would anyone pay you just to blabber general nonsense?"

"Google. Everybody knows where it is headed. The Chinese Google, my tech and I were playing with that and making money long before July. If you can do what I ask, I want your advice. If not, I will cancel my subscription and go elsewhere. There are two whom I have found that do what I ask, and I am happy with them even though they brag too much."

"I hope you understand what I am saying and are man enough to answer my question and then prove it."

The 5: We'd try to be man enough if we had some idea what you're talking about.

"Been using the hollow book safe concept for decades," writes a reader shifting to the more practical solution we've cobbled together with the Gold Buffalo and Silver Eagles. "I used to make them for friends as gifts. You can buy books for a buck or two at the local Sally Ann store. However, making it hollow is labor-intensive."

"Good advice, pick a really boring title. Something to do with economics should do, because you don't want anyone picking it up out of curiosity."

The 5: Yeah, we got that part covered. Heh.

"One word of warning, however," the reader continues, "all cops are on to it. It's a known drug dealer hiding spot."

"I am surprised," writes another, "that at this juncture the word 'buffalo' is still used to describe the creature on the gold piece discussed in The 5! There are no buffalo in the U.S.; however, there are bison."

The 5: Oy.

"I had long ago thought that eventually the mistake would be corrected during my 40 years after exiting public education, but perhaps I expected too much. Call me 'picky' if you like; however, just to continue this animal's misidentification, rather than correct it, shows an underlying fault of which we are all guilty at times — staying on the easy road of continuing the error, rather than stopping to change it."

"Otherwise, I have been well educated on the finer points of monetary systems and markets by reading The 5. I fear we may have already gone past the point of no return with the national debt; and with the Fed compounding the issue with its printing presses, default will be the only option left — and more sooner than later."

The 5: Blame the U.S. Mint. They named the beast on the coin's reverse…

Cheers,

Addison Wiggin
The 5 Min. Forecast

P.S. "Small companies need to think wisely about an investment in alternative energy," reads a new piece in Inc. magazine drawing on the expertise of our own Byron King. If you've ever thought about, say, putting solar panels on the roof of your business, read on:

"Often, a good first step is to make sure your building is well insulated and that any existing energy system is as efficient as possible."

"Besides solar, fuel cells and geothermal, King says another idea is to consider adding a natural gas microturbine… The turbines can be used for co-generation with your utility to lower your carbon footprint."

"King advises companies to be careful, especially when it comes to incentives. Solar power may not work for every company, especially if there is not enough sunshine. More importantly, he says the government incentives for solar power are what make it attractive, but they might not always exist."

Byron's entry-level newsletter, Outstanding Investments, keeps an eye on alternative energy opportunities in addition to traditional oil-and-gas plays and precious metals. Access here.

'Cataclysmic' events are crisis of socialism, not capitalism, Turk tells King

Posted: 09 Nov 2011 07:35 AM PST

3:33p ET Wednesday, November 9, 2011

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk today tells King World News that "cataclysmic" events in the world financial system may be imminent as Italy loses its ability to pay its debts and drags down banks all over the world. This, Turk argues, is a crisis not of capitalism but of socialism, unaffordable entitlements. You can find an excerpt from the interview at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/9_Ja...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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The United States Once Again Can Establish a Stable Dollar Worth Its Weight in Gold

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