saveyourassetsfirst3 |
- Burned By Solar
- Tanzanian Royalty's Short Interest Growing -- Stage Set For A Big Reversal
- Why Investors Are Selling GM Like Crazy
- Reviewing the Macro ‘Play’
- Gold Bugs Will Be Vindicated
- Bull Market in Gold “Not Over” But Speculators Turn Bearish as Greek Insolvency Looms
- Nepalese currency under pressure
- Gold and Base Metal Plays: Jerome Hass and Jimmy Chu
- Gold Negative YTD In Dollars But Bull Market Not Over - Morgan Stanley
- Markets Doom & Gloom of Another Variety
- Major Bottom in PMs Could Occur This Week
- View From the Turret: JPMorgan Touches Off A New Risk Firestorm
- IMF to buy $2.3 billion in gold!
- Gold & Gold Miners Are Closing in on a Major Bottom
- Bull Market ‘Not Over’ but Speculators Turn Bearish
- Bullion Down but Bull Not Over – Morgan Stanley
- Perfect Storm Rising
- Major Bottom in Precious Metals Could Occur This Week
- Frontrunning China's Insatiable Demand For Gold….
- Richard Russell – Stay in cash and gold coins
- Crude Oil, Gold Sink as Euro Fears Grip Markets
- Michael Olenick: WhaleMu – JP Morgan’s Next Surprise?
- Gold & Silver Market Morning, May 14 2012
- Gold Goes Down
- DTS: When I will buy Silver
- The Real Price of Silver
| Posted: 14 May 2012 06:06 AM PDT By Dividend Dog: In a prior article I laid out conditions where solar panel investing would reap risk-adjusted returns. Thanks to data provided by the California Solar Initiative, I will revisit some of the assumptions in my earlier article with real world data. Unfortunately, the results are terrible for would-be solar installers and companies in the solar industry. Stock investors should avoid the industry altogether since its photovoltaic panel systems are not economically viable without government subsidies. The Basics of Installing a Photovoltaic Solar System At the end of 2011, California's average cost per watt for a solar system ran roughly $6.75 per watt, which is much higher than the $1-2 per watt attributable to the solar cell itself. For example, First Solar (FSLR) has announced that its manufacturing costs have reached one dollar per one watt cell. Since photovoltaic (PV) panels have dropped in price over the past decade, PV cells are Complete Story » |
| Tanzanian Royalty's Short Interest Growing -- Stage Set For A Big Reversal Posted: 14 May 2012 05:53 AM PDT By Simit Patel: Tanzanian Royalty Exploration (TRX) is one of my favorite gold stocks -- it constitutes the second largest position in my entire stock portfolio. There are a few notable developments in the stock that I thought warranted a discussion: 1. Short Interest Growing. TRX's short interest has been steadily growing thus far in 2012. High short interest in quality gold stocks is something I really like to see, as invariably these shorts are going to need to cover -- and when they do, price could really take off if the company is as solid as bulls believe it to be. 2. New Drill Results. TRX just announced some new drill results pertaining to its Buckreef Gold Project in Tanzania. The drill results suggest some high grade ore, with grams per ton routinely ranging from 2 to nearly 10. In a world where ore grades under 1 gram per ton are commonplace, Complete Story » |
| Why Investors Are Selling GM Like Crazy Posted: 14 May 2012 05:53 AM PDT By Dividend Kings: General Motors (GM) is not an attractive investment at this point in time. Nothing has changed that much with GM since the bailout. Its main rival Ford (F) shows more growth, more potential at a lower discount and a more assertive plan for change. I do not see any silver lining in GM's current outlook towards prominence. I favor Ford over GM because it has a competent plan for change. GM seems to be hoping for prosperity by going along with more of the same tactics before the crash and before bankruptcy. There are several factors that make General Motors an unattractive investment. At best, this is a long term investment for far into the future. It's only hope depends on recovering economies and an eventual revamping of the current business model. It is doubtful that GM will be able to sustain leadership in any market over an extended period Complete Story » |
| Posted: 14 May 2012 03:47 AM PDT There are signs in the recent jobs and ISM reports that the previously inflated economy is decelerating. Late last week, the clown running JP Morgan said stupid things about the smart [read: talented] people he has running his high risk trading operations. Europe is of course front and center as it continues to fall apart, with Gilts and Bunds rising on 'safe haven' buying and the bonds (debt) of Greece and other Euro basket cases declining toward their value, which is less than zero. The precious metals appear to be watching for signs of outwardly promoted QE policy. But NFTRH has remained cautious on the timing of this pending a crack in the US stock market, so let's review the big index.  People have gotten into trouble by failing to see that there would be little likelihood of policy maker 'QE' action with the broad US market flying around up there near post-2009 recovery highs. Our view has been that at the least, SPX must break down and test some support levels that were created out of the most recent downside turmoil, which was last summer's acute phase of the Euro crisis. Otherwise, the Fed sits back and does little more than monitor the situation. Well, the SPX is now testing a very important support level. If 1360 fails, the objective becomes 1300 strictly based on the measurement of the topping pattern. But it is more likely that the support zone in the 1260 to 1280 range would be tested as that is where visual support and standard retrace levels out of last summer's bottom start coming into play. The JPM noise reminds the public of the rotten scoundrels that wrecked the system in 2008 and it and any coming similar noise can only be supportive of policy makers laying in wait to inflate. 'Laying in Wait to Inflate'… sounds like the title of a future public article. The Fed is among other things, a political animal. I believe this animal becomes sensitive to calls for auditing its operations and austerity of policy with the public's money. I also believe the Fed is boxed into a corner with an unofficial 'inflate or die' mandate because deflation scholar Ben Bernanke knows full well what would happen if the whole stinking inflated mess were to implode in a falling macro soufflé of debt, derivatives and leverage. It is an election year and thus, we are on watch for the right conditions that would draw out policy from the inflators. SPX at 1420 is not gonna do it. SPX at 1260 just might, if it comes along with further signs of erosion in the economy. Every 'jobs' report going forward becomes a potential flash point. NFTRH187 goes on to update technical and fundamental analysis of the gold sector, which would be an important first mover to any coming inflationary policy, if applicable. 187 discusses our long-held theme of deflation as a 'lever' that is necessary to future inflationary actions. We look at seasonals within election years and review the entire outline of the favored plan for the balance of 2012. http://www.biiwii.blogspot.com
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| Posted: 14 May 2012 03:39 AM PDT When this mispricing is inevitably resolved, it is unlikely to be gradual. It will be so swift that those old-fashioned enough to own gold for insurance purposes will have the protection they sought. |
| Bull Market in Gold “Not Over” But Speculators Turn Bearish as Greek Insolvency Looms Posted: 14 May 2012 03:19 AM PDT
Bull Market in Gold "Not Over" But Speculators Turn Bearish as Greek Insolvency Looms THE PRICE OF GOLD and gold futures dropped yet again Monday morning, recording the seventh drop in nine trading days in May so far as industrial commodities, global stock markets and the Euro currency all sank amid Athens' failure to negotiate a new coalition government. Silver bullion also fell hard, touching $28.44 per ounce and losing 8.9% from the start of this month. The price of Spanish government debt today fell yet again, pushing 10-year yields above 6.2% ahead of an auction of new bonds later today. Greek public-sector salaries and state pensions may be unpayable "from the beginning of June" says a letter from stand-in prime minister Lukas Papadimos to party leaders, republished by Ta Nea, after May's tranche of the international bail-out was cut and tax revenues came in below target. "We do not think the gold bull market is over," says a note from Morgan Stanley analysts, even though "gold has moved lower and is trading at levels not seen since December 2011." Viewed on a technical chart analysis, "Damage has certainly been done [but] we do not think it is irreversible," they add, pointing to a sharp rise in speculative "short selling" by gold futures traders now expecting prices to fall further. "The last time positioning was at these levels, prices embarked on a move higher, rallying to near $1800 per ounce. We are buyers of gold here." The rise in speculative short-selling of gold futures is "disconcerting" however, says Marc Ground at Standard Bank, because "while investors have over the past few weeks appeared cautious of running too short on gold, this fear seems to have evaporated." Over in the currency markets – where the Euro fell to new 4-month lows vs. the Dollar at $1.2860 – "We continue to target $1.20 for Euro/Dollar," says Ground's colleague, currency strategist Steve Barrow. "Whether this takes time, or comes in an instant, could depend on the outcome of Greece's political impasse." Energy, metal and food prices all sank once more Monday morning as European stock markets lost more than 2% of their value, with Madrid losing 3% and Athens dropping 5.3%. At the weekend Swedish central banker Per Jansson said that "of course the question [of a Greek exit] is discussed." Irish central bank chief, and fellow European Central Bank policymaker Patrick Honohan told journalists that "technically, it can be managed." "We wish it to be possible for Greece to remain in the euro but Greece must live up to its commitments," a spokeswoman for the European Commission said Monday morning. If Greece breaches the agreed terms of its bail-out deal then staying in the Euro would be "an impossible equation and I think in that sense it is an irresponsible statement," said Finland's Europe minister Alexander Stubb today about the ongoing calls for an end to cuts in Athens. German chancellor Angela Merkel meantime suffered a drubbing in a state election on Sunday, with her Christian Democratic Union drawing only 26% of the vote in North Rhine-Westphalia, giving the coalition of Social Democrats and Greens a winning majority of 50%. Price inflation in Germany's wholesale markets rose sharply in April, new data showed today, while industrial production across the 17-nation Eurozone fell much harder than forecast, down 2.2% year on year. On the FX market, the Euro today hit fresh 42-month lows vs. the British Pound, but fell less quickly than gold futures or bullion, with the gold price for Eurozone buyers slipping beneath €39,100 per kilo for the first time this year. For Indian buyers, "The weakness of the Rupee is countering the fall in the Dollar gold price," says Jeffrey Rhodes, global head of precious metals at INTL Commodities DMCC in Dubai, speaking to the Wall Street Journal. "That's likely to act as a drag on demand in the world's biggest market." "There is hardly any work these days," complains a Jaipur goldsmith to The Times of India. "First the 21-day long jewelers' strike and now the increasing gold prices have rendered us jobless. "It is getting tough for us to survive." India's imports of gold bullion fell by two-thirds last month compared with April 2011. Gold futures on the Multi Commodity Exchange in Mumbai today slipped back to a 5-week low, down 3.3% from early May's new all-time highs. Adrian Ash Gold price chart, no delay | Buy gold online at live prices Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees. (c) BullionVault 2012 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| Nepalese currency under pressure Posted: 14 May 2012 02:00 AM PDT Gold priced in Nepalese rupees hit a new record high per troy ounce earlier this month, at 56,000 Nepalese rupees per tola. After neighbouring India recently announced a rise in its gold import taxes ... |
| Gold and Base Metal Plays: Jerome Hass and Jimmy Chu Posted: 14 May 2012 01:57 AM PDT |
| Gold Negative YTD In Dollars But Bull Market Not Over - Morgan Stanley Posted: 14 May 2012 01:46 AM PDT gold.ie |
| Markets Doom & Gloom of Another Variety Posted: 14 May 2012 01:15 AM PDT After suffering a roughly 4% loss last week, gold prices headed even lower overnight and this morning as further erosion in crude oil and the euro and further advances in the US dollar made life more difficult for the few remaining bulls in the market. |
| Major Bottom in PMs Could Occur This Week Posted: 14 May 2012 01:07 AM PDT The author presents charts and points that might be worth considering by those planning a buy. Worth reading imho.:lollypop: "Normally catching a bottom is not difficult. Bottoms tend to occur instantly while market tops form during a process. Yet, I've found that bottoms of long-term significance do not occur instantly. Like tops, they can take time to develop. For example, think about late 2008 to early 2009. Commodities hit their price low in December but the bottoming process began in October and wasn't complete until May. Emerging markets hit their low in November but the process began in October and ended in March. Returning to the present, we see that Gold and Silver look set to retest their late December lows. Our work leads us to argue that the metals will successfully retest their lows and soon emerge from what in the future will be considered a major bottom in-line with 2008, 2005 and 2001." http://thedailygold.com/major-bottom-in-precious-metals-could-occur-this-week/ FYI/DYODD, R. |
| View From the Turret: JPMorgan Touches Off A New Risk Firestorm Posted: 14 May 2012 01:06 AM PDT
JPMorgan Chase & Co. (JPM) announced quarterly earnings which included a surprise $2 billion trading loss. The news sent the stock spiraling 10% lower and raises significant questions about the company's ability to manage risk. On the surface, the trading loss could be brushed aside as a "one-time" mistake, that doesn't really affect the overall market. Aside from the trade, JPMorgan's "ongoing" business was relatively stable for the quarter But in reality, the loss is a startling reminder of how vulnerable the global financial industry has become, as a result of a number of factors:
In a ZIRP (Zero Interest Rate Policy) world, investors have to become more and more creative to generate income – and that is true for corporations as well as individuals. Banks in particular have an irresistible incentive to take more trading or business risks in order to generate returns on capital they can access for nearly zero cost. So whether Jamie Dimon categorizes the loss as a poorly executed hedge or a flat out speculative position (or even "hedging their hedge" as the WSJ reports), the bottom line is that risks are accumulating to the point where it is impossible to determine the potential outcome scenarios – which by definition increases the risks for the industry, and in turn the entire market. Even without the JPM trading loss, equities have been weakening throughout this quarter's earnings season. Industry leaders like Apple Corp. (AAPL) are failing to hold key support lines, and more speculative growth stocks with high multiples are particularly vulnerable. Below are a few trading areas we are watching this week…
 A New Batch of Risk for Financials JPMorgan Chase is likely to be the new poster child for the Volcker Rule aimed at curbing the amount of risk banks take through their trading desks. Under the proposed regulations, these trading desks will be relegated to hedging activities rather than speculative trading. But the argument Jamie Dimon is making is that the botched trade in question would have actually complied with the rule as it was actually put on to manage risk. So is that supposed to be comforting? "Don't worry that we lost $2 billion because it was actually just an incompetent attempt to manage our risk." Institutional investors now have to take a much more serious look at the risks for the mega-banks, and are very likely to reduce their industry allocations. As capital flows out of the sector and into "safe haven" sectors, chart patterns are breaking down for financial stocks. A breakdown in the banking sector brings back not-so-distant memories of the 2008 crisis – and fears of a repeat situation could accelerate the drop. Aggressive short sellers piling into positions just as fearful investors begin to bail could easily set off a firestorm that would quickly spread into other areas as well. We're watching the financials closely, looking for potential entry points with reasonable reward-to-risk setups, and also viewing action in the financial sector as a good barometer for institutional risk appetite.
As if the risks from financials and the European debt crisis wasn't enough, traders are also dealing with a major deceleration in growth from emerging markets. Economic reports out of China have been particularly soft (and there's a good chance that these numbers are still being positively "skewed" by the government). Last week we learned that industrial production for April was up 9.3% – the slowest growth in nearly 3 years. India's industrial production actually fell 3.5% versus last year – a major concern for emerging market bulls. The good news (if you want to call it that) is that decelerating growth along with lower inflation numbers gives policymakers more latitude for stimulative measures. The propensity for central banks from all sides of the globe to attempt to manufacture stable growth has had a significant effect on chart patterns – which in turn has affected traders who rely on the chart patterns to generate signals. While the macro picture still leaves traders vulnerable to choppy conditions, breakdowns in emerging market indices have the potential to create good reward-to-risk scenarios – providing the positions are managed carefully.
Cisco Drops Its Own Earnings Bomb Aside from the JPMorgan surprise $2 billion dollar loss, traders also had to deal with a grim outlook from Cisco Systems (CSCO) CEO John Chambers. On the third quarter earnings call (CSCO operates with a July fiscal year end), Chambers noted a dramatic slowdown in corporate spending – which he claimed was an industry-wide phenomenon, confirmed by his colleagues from competing firms. The stock plummeted Thursday and tacked on substantial losses Friday as well – as investors bailed out of an apparently sinking ship. A few weeks ago, we noted weakness in networking stocks, and outlined a number of targets in the sector. Now that CSCO has confirmed the weakness in the industry, the likelihood of bearish follow through is very strong. The very best scenario would be for networking stocks (along with semiconductors and possibly the hardware and software areas) to catch a relief rally or consolidation, giving us an opportunity to set up new short entries with a manageable risk envelope. As the technology industry heads lower, trading opportunities are becoming more attractive, and we are willing to commit more capital to bearish bets.
Equities are opening soft to start the week with more Greek drama and plenty of risk in play. We're comfortable with our bearish exposure, and tightening our risk points to lock in profits. This week we have a number of key retailers announcing earnings (TGT, WMT, ANF, LTD, GPS etc) along with plenty of news from Europe, the financials – and of course the Facebook IPO. Stay nimble and alert. There are plenty of crosscurrents even as some of the haze is removed from the bearish big picture. Trade 'em well this week!
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| IMF to buy $2.3 billion in gold! Posted: 14 May 2012 12:28 AM PDT Of course you have to go to an Indian newspaper to find this news.  IMF to buy Gold worth $2.3 billion as credit risk increases Last Updated : 14 May 2012 at 17:05 IS NEW YORK (Commodity Online): The International Monetary Fund (IMF) is planning to purchase more than $2 billion worth of gold on account of rising global risks. The IMF currently holds around 2800 tonnes of gold at various depositories "The Fund is facing increased credit risk in light of a surge in program lending in the context of the global crisis. While the Fund has a multi-layered framework for managing credit risks, including the strength of its lending policies and its preferred creditor status, there is a need to increase the Fund's reserves in order to help mitigate the elevated credit risks", Bloomberg quotes a report by an IMF staff while also adding that a $2.3 billion gold purchase is in the planning. IMF's borrowers include Eurozone countries like Greece and Portugal. Greece is IMF's biggest borrower and the nation is currently caught in a political deadlock that seems bent on denying itself the much needed bailout fund. Countries like Spain is also officially in recession after its first quarter GDP contracted. Other nations in the Eurozone region is also showing increased signs of slow manufacturing activity and economic growth. In such a risky financial environment, the IMF's move could be considered wise and can be seen as an indication of how much trust the mainstream financial community now has on precious metals like gold. http://www.commodityonline.com/news/...2-3-48053.html |
| Gold & Gold Miners Are Closing in on a Major Bottom Posted: 13 May 2012 11:38 PM PDT "You can't understand what lays ahead if you don't understand the past" ~ Satellite, Rise Against ~
Members of my service as well as long time readers know that I do a lot of analysis based on the past. I am constantly looking at long-term historical price charts and data. As a trader, I am always looking for an edge. Obviously the keys to long-term success involve proper position sizing, risk management mechanisms, and ultimately leveraging probability. Professional traders are masters of these tenets. These characteristics are what separate successful traders from average traders over the long haul. Sometimes through my rigorous analysis I come across price charts and oscillators that help put together a picture that helps shape my view of the marketplace. The past few months have been some of the most difficult market conditions that I have seen in some time. The "wall of worries" permeates the financial landscape as risk at present seems unprecedented. The list of macroeconomic concerns ranges from the European sovereign debt crisis to escalation of military action in the Middle East. I could probably write an entire article about the various risks that plague global financial markets at present, but I try to focus on the positive in any situation. Right now remaining optimistic is a daily battle amid the constant barrage of depressed economic data. Instead of focusing on all of the various risks, I focus on finding opportunities where probabilities are favorable based primarily on historical price data, cycle analysis, and tape reading. Back on April 9th I proffered an article that discussed my expectation that the U.S. Dollar Index would rally while risk assets such as equities and oil prices would collapse. Additionally I commented on my expectations for weakness in gold, silver, and the entire mining complex. I was wrong about the timing of the U.S. Dollar's advance, but the ultimate price action analysis was correct. The following quote came from that article, "As shown above, I believe that short term targets to the downside are likely somewhere in the 1,475 – 1,525 price range. I think gold will find a major bottom near these levels and a strong bounce will play out." (Click here to view the entire article) When I originally wrote that article referring to a decline in gold prices gold futures were trading around 1,630 an ounce. Price rallied sharply higher after my article went public, but fast forward to today and my concerns appear to be well founded. I am a long-term gold bull and I ultimately believe that new highs will occur in the future. However, gold and gold miner's may have further to fall before they find major support. As stated above, my original expectations for the Dollar Index did not happen in the time frame I was anticipating. However, the belief that a rally was forthcoming proved to be accurate as can be seen from the price chart of the U.S. Dollar Index shown below. U.S. Dollar Index Daily Chart 
As can be seen above, the price action is confirming serious strength. The weekly close on Friday saw the Dollar close above a key short-term resistance level. Additionally I would point out the double bottom that has been carved out on the chart above which is also bullish. Should resistance near 80.76 give way to higher prices a test of the recent highs is quite possible. The technical picture suggests higher prices in the near term for the greenback. From a fundamental viewpoint, recent economic data also suggests that higher prices may await as one the largest weekly debt issuance of 2012 among sovereigns within the Eurozone will transpire next week. If any of the debt auctions go poorly it will reflect negatively on the Euro currency and help push the Dollar higher. Most of the debt issuance is outside of the 3 year maturity window so the LTRO justification to encumber risk does not apply. Next week we will find out just how serious investors are about accepting default risk on European debt instruments. I would be shocked if the ECB sits idly by, but the sheer amount of capital required to safeguard debt issuance next week is extreme, even for a major central bank. The Euro currency continues to fall and has broken key resistance around the 1.30 price level on the EUR/USD currency pair. Price is not collapsing as of yet, but we are seeing a slow and steady slog lower for the Euro. This price action serves to boost the Dollar which ultimately places downward pressure on risk assets such as equities and oil. Additionally, it reduces the valuation of gold. The daily chart of gold futures is shown below. Gold Futures Daily Chart 
The recent price action in gold has been quite ugly and price is resting at key support stemming from an intermediate-term descending channel shown above. Should the lower bound break to the downside a sharp move lower could play out. It is important to remember that gold is coming off a monster multi-year bull run and it only serves to make sense that a nasty pullback that shakes out the bulls would be forthcoming. I continue to believe that strong support and buyers will come back into gold around the 1,450 – 1,550 price range as significant long-term support levels should hold up prices. The key support zone is clearly illustrated in the chart above. I continue to wait for price to reach that key support level and based on the current proximity those support levels are magnetizing price toward them. When long-term support / resistance levels are near price a test is a common occurrence. The most important question to ask is whether the support zone shown above will hold, or will even lower prices ultimately play out? Gold and silver both are starting to become oversold on the daily time frame. While the gold bugs have been feeling pain the past few weeks, the gold miners have been taken out back to the woodshed for a good whipping. The miners have been absolutely crushed in 2012 . My long term analysis revealed something quite extraordinary on the longer term weekly chart of the HUI gold mining index which I believe is critical for readers to watch and monitor. We are nearing valuation levels based on the true strength index that have not been seen since the market crash that took place back in 2008. The weekly chart of the gold bugs index is shown below. Gold Bugs Index Weekly Chart  As can be seen above, the Gold Bugs Index (HUI) has been under considerable selling pressure since early September of 2011. However, note how low the True Strength Index is based on 5 years of price data. We are nearing the same level that we saw back in 2008 which marked a major bottom that ultimately resulted in a monster move to the upside for the gold miners. I am of the opinion that this chart demonstrates quite clearly that a great buying opportunity for gold, silver, and the miners is likely going to present itself in the near future. I will be watching this price relationship over the next few weeks waiting for a strong entry point for a longer-term purchase. After this pullback concludes, the potential returns that could occur in gold, silver, and the miners could be breathtaking. With 3 clear support levels, a defined risk approach could be used in order to scale in or to reduce market risk should prices continue to move below each support level. While the time is not right just yet, more than likely a solid long-term risk / reward trade may very well present itself in the precious metals and mining space. I am likely a bit early, but the ultimate end game as it relates to fiat currency is documented throughout history. The final result has a finality that few truly comprehend. If you enjoyed this article and analysis, you can get our detailed trading analysis videos every Sunday, Monday, Wednesday and Thursday here risk free: http://tradersvideoplaybook.com/risk-free-30-day-trial/ Happy Trading and Investing! This material should not be considered investment advice. J.W. Jones is not a registered investment advisor. Under no circumstances should any content from this article or the OptionsTradingSignals.com website be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This information is for educational purposes only. |
| Bull Market ‘Not Over’ but Speculators Turn Bearish Posted: 13 May 2012 11:25 PM PDT The price of gold and gold futures dropped yet again Monday morning, recording the seventh drop in nine trading days in May so far as industrial commodities, global stock markets and the euro currency all sank. |
| Bullion Down but Bull Not Over – Morgan Stanley Posted: 13 May 2012 10:37 PM PDT Gold has fallen again today and has now erased the gains for the year. Gold edged up in early Asian trading as bargain hunters lifted prices from four month lows, but gains were capped and prices gradually fell and falls continued in European trading. |
| Posted: 13 May 2012 10:24 PM PDT
from zerohedge.com: The only good news spin this morning was that the Greek, pardon Spanish contagion, has not reached Italy, after the boot-shaped country sold €5.25 in bonds this morning at rates that did not indicate a meltdown just yet. It sold its three-year benchmark at an average 3.91 percent yield, the highest since January but below market levels of around 4 percent at the time of the auction. It also sold three lines due in 2020, 2022 and 2025 which it has stopped issuing on a regular basis. And this was the good news. The bad news was the not only has the Spanish contagion reached, well, Spain, but that everything else is now coming unglued, as confirmed first and foremost by the US 10 Year which just hit a new 2012 low of 1.777%. Spain also is getting hammered with CDS hitting a record wide of 526 bps overnight, and its 10 Year hitting 6.26% after the country sold 364 and 518-Day Bills at rates much higher rates than on April 17 (2.985% vs 2.623%, and 3.302% vs 3.11%). But the highlight of the day was the Banco de Espana release of the Spanish bank borrowings from the ECB, which to nobody's surprise soared by €36 billion in one month to €263.5 billion, more than doubling in 2012 from the €119 billion at December 31. Keep on reading @ zerohedge.com |
| Major Bottom in Precious Metals Could Occur This Week Posted: 13 May 2012 10:23 PM PDT
from news.goldseek.com: Normally catching a bottom is not difficult. Bottoms tend to occur instantly while market tops form during a process. Yet, I've found that bottoms of long-term significance do not occur instantly. Like tops, they take time to develop. For example, think about late 2008 to early 2009. Commodities hit their price low in December but the bottoming process began in October and wasn't complete until May. Emerging markets hit their low in November but the process began in October and ended in March. Returning to the present, we see that Gold and Silver look set to retest their late December lows. Our work leads us to argue that the metals will successfully retest their lows and soon emerge from what in the future will be considered a major bottom in-line with 2008, 2005 and 2001. We begin with a daily chart of Gold which shows its daily closing prices and a volatility indicator. The percentage figure refers to the percent bullish reading from the daily sentiment index. As we noted recently, each bottom in Gold (except 2008) has come during a period of low and declining volatility. Volatility is currently at a 9-month low while only 7% of traders are bullish on Gold. Keep on reading @ news.goldseek.com |
| Frontrunning China's Insatiable Demand For Gold…. Posted: 13 May 2012 10:21 PM PDT
from news.goldseek.com: I like investing in commodities because they're very simple to understand—it's all about supply and demand. Naturally, I take a very strong interest in the increasing demand for gold coming out of China. You see, in the short run, the paper markets (leveraged traders) rule the day. In the longer run, the physical market is all that matters. In the past few months, we've seen some very important changes in the physical market for gold—China is hungry. In this year's first quarter, Chinese gold production hit a record around 80 tons, but that's only part of the story. The real story is on the import side, where China imported 135.5 tons (up from 19.7 tons last year). In total, China is now consuming almost 30% of the world's gold production. India is no longer the price setter—China is. Even more interestingly, gold imports are starting to rise rapidly, 32,948kg in January, 39,668kg in February and 62,913kg in March. If there is one true lesson from the past decade, it is to watch what China needs. When their internal production can no longer fill the need and they resort to imports, watch out!! Import demand starts small and grows forever. Keep on reading @ news.goldseek.com |
| Richard Russell – Stay in cash and gold coins Posted: 13 May 2012 10:19 PM PDT
from kingworldnews.com: With continued volatility in global markets, the Godfather of newsletter writers, Richard Russell, warned his readers to "be out of all stocks." Here is what Russell had to say: "Between the years 2007 and 2009, we experienced the first part of a vicious bear market. The violence and rapidity of the losses in that bear market were shocking to most people. In fact, I'd say that the retail public was so shocked and wounded by the 2007 to 2009 bear market that they have stayed out of the stock market ever since." Richard Russell continues: Keep on reading @ kingworldnews.com |
| Crude Oil, Gold Sink as Euro Fears Grip Markets Posted: 13 May 2012 10:09 PM PDT Commodity prices are trading broadly lower in European hours as Greece-linked jitters continue to weigh on risk sentiment trends. Growth-sensitive crude oil and copper prices follow stocks lower while safe-haven flow buoy the US dollar, pressuring precious metals. |
| Michael Olenick: WhaleMu – JP Morgan’s Next Surprise? Posted: 13 May 2012 09:23 PM PDT By Michael Olenick, creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data In an admittedly strange twist of timing JP Morgan, the same JP Morgan that just announced a surprise $2 billion loss caused by the "London Whale," became the first and only of 26 banks disclosing subprime investor data to flip me the digital bird, refusing access to the public loan-level performance data for their Washington Mutual loans. WaMu, one of the most reckless subprime lenders, was swallowed whole by JPM and they're having serious indigestion. Nelson D. Schwartz and Jessica Silver-Greenberg of the New York Times verify that the purpose of the Chief Investment Office — the London Whale — is to offset risk caused by the Washington Mutual loans:
It isn't hard to figure out why JP Morgan doesn't want anybody looking into and through their garbage. I have not been able to ascertain whether these reports are required under disclosure requirement Regulation AB (the law itself seems to say yes, but the experts I spoke to gave divergent readings). Whether they are or aren't, JPM's refusal — when everybody else cooperated speaks for itself. As those loans sour, and they continue to rot like a dead skunk on a hot July day, the bets needed to offset the losses are increasing. It looks like the bank, peering into that portfolio they refuse to share, is becoming more than a little bit desperate. Like a compulsive gambler after a multi-day bender resulting in crippling losses they decided to double down rather than walk away, leading to their current whale of a surprise and likely a mirror-image follow-up for the WaMu losses this was supposed to offset. For anybody who believes that JPM's position is normal .. it isn't. Twenty-six other banks quickly popped open the doors to their repositories, as they're required to do. Perennial bad-boy Aurora Loan Services is the only other one that's ignored my requests, though since it looks like they've sold their servicing operations the jury's out whether their silence is purposeful or whether there's nobody home on the other side of those requests. Like I said, I'm not sure whether these disclosures are exempt. There are certainly many marked private, but they seem to be overwhelmingly CDOs and similar more exotic or clearly closely held instruments. I've never seen an entire series of MBS from an issuer that is exempt: even a few stray WaMu deals that ended up in other repositories are open to the public. JP Morgan's insistence that "[t]he site is maintained for JPMorgan Chase RMBS clients," only, demanding that I include my JP Morgan Chase contact, may be legal but it is unprecedented. In context of their recent trading losses, the knowledge that those losses were to hedge against the WaMu losses, Dimon's prior comments downplaying both losses, and strong analysis that the WaMu loans are some of the most impaired MBS it's fair to conclude that JPM is hiding something in the basin of their loan outhouse. I've spent the past couple months holed away downloading MBS data in bulk to enable investors, analysts, academics, government agencies, or whoever else wants to inspect performance information and project losses for every subprime loan trust. When finished, this week hopefully, I'll have a veritable ABS MRI machine that can peer into the true health of the housing and housing finance market. It's harder than it sounds: one of those projects where software engineers emerge from their digital caves after months, bleary eyed and long past due for a haircut but holding game-changing technology. My database, which includes everything except WaMu loans thanks to Jamie, is finally almost finished. But even in preliminary form it is clear that the AAA-rated senior tranches — the ones that really were never supposed to take losses — are toast that's burning worse by the day. Servicers, trustees, government officials have been doing anything to delay the inevitable losses but when people don't pay their mortgages, and housing has declined by over 50% in many of their markets, there's only so much accounting chicanery they can do: the money just isn't there. My suspicious are more grounded than tin-hat delusions we've been hearing from the housing is hot again crowd. R&R Consulting, a well-regarded structured valuation expert I work closely with conducted a portfolio-wide analysis of undisclosed ("limbo") losses on RMBS. In a special in-depth report dated February 2012, long before JPM told me piss-off when asking for access to the more granular WaMu loan-level data, they reported that WAMU had the highest limbo loss level–about $810 million—in just one transaction. Repeat: experienced analysts dug this out even without loan level data. It sounds likely that it won't be long until Dimon reports another ten-figure surprise that I'm sure he'll apologetically pawn off on the US taxpayer. For anybody asking "um — isn't this over — didn't all this fall apart back in 2008?" the answer is not really. That mega-meltdown was really a mini tremor caused by the lower and smaller tiers of these securities; last time junior visited to stir things up but this time papa's walking down the street carrying a mean look and a big stick. That's because the mezzanine level tranches of most bubble-era MBA are either gone or guaranteed to be gone — finally eaten up by current or pending losses — leaving the lower AAA tranches to take their place as the bearer of losses. This was never supposed to happen. Everybody knew that CDOs created from the lower tranches were risky, even if the ratings agencies said otherwise, but nobody thought the meltdown would last this long that the actual top tranches would be nicked. But the data couldn't be clearer: those bottom level A-class tranches of yesterday are the new bottom level M-class tranches of yesterday. All this is surprising because these same MBS tranches have been on fire lately. Hedge funds bought them for very little when nobody wanted them — setting their own price — and now they're selling them back at steep gains because housing is peachy again, never mind the enormous amount of shadow inventory. Hopefully the buyers of these same securities aren't being set up, again, because nobody would be stupid enough to fall for that same trick, again. Hopefully. It is these lower tranches and other derivative products, which are by definition exponentially smaller than the more senior securities like the ones JPM is hiding (well, before the banks multiplied them several times over using credit default swaps) that blew up the world economy in 2008. I'm guessing that it is the inevitable meltdown of what remains of the AAAs (the amount outstanding has been reduced considerably by refis) that has been at the impetus for the housing cheerleaders. By refusing to move their foreclosures forward, then refusing to take title, then refusing to REO those homes, the trusts don't have to recognize the losses because, ya' know, the abandoned and dilapidated properties will magically double in value as long as we hold our breath and wish. My mountain of data that shows loss severity in excess of 100-percent is not uncommon. When we look at the loans, compare similar loans from those who report them more honestly, multiply the average severity by pending reported and, um, overlooked foreclosures, then it becomes clear that the lowest rated AAA's are toast. This reaffirms the report by R&R Consulting report that $175 billion of loan level losses had not been allocated to the trusts. Whoops! Jamie Dimon admitted his $2 billion loss "plays right into the hands of a bunch of pundits out there" on his conference call explaining his stinky. Dimon went on to call the losses "egregious" and "self-inflicted." In light of the London Whale it is clear that when it comes to sky-high risk, like JPM's WaMu exposure, the bank has adopted an advanced risk management strategy: telling researchers to piss off then hiding.
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| Gold & Silver Market Morning, May 14 2012 Posted: 13 May 2012 09:00 PM PDT |
| Posted: 13 May 2012 08:47 PM PDT
from businessinsider.com: When the going gets tough, the tough prefer paper money. Gold is at its lowest level this year.
Keep on reading @ businessinsider.com |
| Posted: 13 May 2012 08:36 PM PDT |
| Posted: 13 May 2012 08:07 PM PDT My brother Brian lives in central PA and is a silver stacker. He is always looking for a silver deal. In Lewisburg PA, the Sunday farmers market (flea market) brings food and sometimes buried treasures. It's always a trip bargaining with the vendors and trying and score a silver deal as close to spot as possible. He usually always rings me with his deal of the week. Today 5.13.12 silver spot price is $28.95 and I received this uncommon voicemail from Brian. from thevictoryreport1: ~TVR |
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