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Saturday, October 6, 2012

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Positioning And FX Outlook: The Price Of Protection

Posted: 06 Oct 2012 12:12 PM PDT

By Marc Chandler:

We have been tracking the deterioration in the technical condition of the major foreign currencies in this weekly note for the past three weeks. The euro's recovery, off the support we identified here last week near $1.2800, should not overshadow the fact that the dollar's technical tone remains, on balance, still constructive.

Euro volatility continues to trend lower and before the weekend, (3-month implied) dipped below 8.4% for the first time since December 2007. Similar, yen (3-month implied) fell to its lowest level since July 2007 before the weekend.

Volatility has trend lower in the euro as it recovered from the move toward $1.20 in late July. An increase in volatility is more likely to happen if the euro begins falling. Likewise, an increase in yen volatility seems more likely if the dollar declines in the current environment. The VIX dipped below 14% on Friday, which it rarely does, as


Complete Story »

Will The Parti Québécois Alter Québec's Mine-Friendly Policies?: Eric Lemieux

Posted: 06 Oct 2012 12:04 PM PDT

By The Gold Report:

A plan to build roads into mining projects. Tax breaks for junior mining companies. Does the return to power of the Parti Québécois signal the end to the province's mining-friendly policies? Unlikely, according to Eric Lemieux, equity analyst with Laurentian Bank Securities. In this exclusive interview with The Gold Report, Lemieux says that even if the PQ tweaks current policy, it will take time, and he believes there are plenty of good stories to tell and invest in before that happens.

The Gold Report: Eric, you primarily cover mining companies in Québec, one of Canada's most mining-friendly provinces. However, last month the Parti Québécois [PQ] won a minority mandate. Are the glory days for Québec's mining sector over?

Eric Lemieux: Without saying the glory days are over, the election of the Parti Québécois will definitely put things on hold. The PQ has a very pro-environment and anti-mining perspective based on


Complete Story »

Retirement Strategy: 'Team Alpha' Re-Balances For Balance, With Allocation

Posted: 06 Oct 2012 09:43 AM PDT

By Regarded Solutions:

One of the more confusing issues to many investors is the actual amount of money one should put into any one single security. I know it always is an issue for me, and many of our readers have requested that I display the "Team Alpha" allocation for each security held.

It started me thinking how anyone comes up with an allocation formula. The best way for me to explain what I have seen over the years is to list the "popular" ways money has been allocated into stocks.

  • Buy an equal number of shares in each stock.

This one makes everything so simple, and I have done it as well. Let's just buy 100 shares of each stock we pick no matter what the cost. Once we are done, we can see the allocation simply by looking at the dollar amount invested in each stock and its percentage against the


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Greg Weldon’s Near-Term Analysis of Gold & Silver

Posted: 06 Oct 2012 09:17 AM PDT

Greg offers a free, one-time, 30-day trial of three different research publications:

1)  Weldon's Money Monitor (global macro);
2) The Metal Monitor (precious metals markets) and
3) The ETF Playbook.

Click the link to sign up for a free trial and gain immediate access to Greg's latest research including this week's Macro-Market Metal Monitor which covers the Fed's recent policy adjustment and the reaction in the Precious and Industrial Metals.

Top 5 Stocks With Insider Sells Filed On October 5 To Consider

Posted: 06 Oct 2012 07:47 AM PDT

By Markus Aarnio:

I screened with Open Insider for insider sell transactions filed on October 5. From this list, I chose the top five stocks with insider selling in dollar terms. Here is a look at the top five stocks:

1. Dollar General Corporation (DG) has been delivering value to shoppers for more than 70 years. Dollar General helps shoppers Save time. Save money. Every day! by offering products that are frequently used and replenished, such as food, snacks, health and beauty aids, cleaning supplies, basic apparel, house wares and seasonal items at low everyday prices in convenient neighborhood locations. With more than 10,000 stores in 40 states, Dollar General has more retail locations than any retailer in America. In addition to high quality private brands, Dollar General sells products from America's most-trusted manufacturers such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg's, General Mills, Nabisco, Hanes, PepsiCo and Coca-Cola.

(click to enlarge)

Insider


Complete Story »

Jobs report 114,000 new hirings against expectations of 115,000/unemployment rate falls to 7.8%/gold and silver drop on obvious raid/Implats fires 12,000 miners from their S.Africa mine/

Posted: 06 Oct 2012 05:30 AM PDT

Triffin's Dilemma...and the End of U.S. Dollar Hegemony

Posted: 06 Oct 2012 05:20 AM PDT

Author: 
Ed Steer

Yesterday in Gold and Silver

Ed_GSD
October 6, 2012 1:20pm GMT

The gold price didn't do much in either the Far East or London trading yesterday...and the gold price was basically back to unchanged by the 8:30 a.m. Eastern time jobs number release.

The gold price got hit for ten bucks immediately...recovered a bit...and then shortly after 10:30 a.m. the price headed lower once again, hitting what looked like its low of the day shortly after 3:00 p.m. in electronic trading.  From that point, the gold price recovered a bit during the next hour, before trading sideways into the close.

The actual low price tick [$1,771.70 spot according to Kitco] came at 8:45 a.m. Eastern, even though it doesn't show up on either Kitco chart below.  Only the 1-minute tick chart [courtesy of Nick Laird] shows the absolute low.

Gold closed the Friday trading session at $1,781.30 spot...down $9.00 from Thursday.  Net volume was pretty heavy at 166,000 contracts.

Although it doesn't show it on the Kitco chart below...but it did at one time during the Friday trading session...the silver price got absolutely crushed at the release of the jobs numbers.

According to Kitco, the low price tick around the 8:30-8:45 a.m. price smash, was recorded as $34.19 spot at 8:45 a.m. Eastern time.  But sometime during the day, Kitco tampered with both of their silver charts to show that almost nothing happened during that time period...but Nick Laird's 1-minute tick chart shows otherwise.

Why Kitco would do this without any explanation, is beyond me.  However, I know that the company...although very reputable...is strong with the dark side of The Force.

After the initial smash, the silver price followed the same general path that the gold price did...with the low price tick in electronic trading coming at the same time as gold's...before rallying a bit into the close.

Silver closed at $34.51 spot...down 46 cents on the day...but the intraday price move was over 90 cents.  Volume was decent, but not monstrous, as 44,000 contracts changed hands.

As a point of interest, here's what the Kitco silver chart looked like shortly after the engineered price decline...and before they massaged it to look like the Kitco silver chart above.  I borrowed this chart from a posting over at silverdoctors.com that West Virginia reader Elliot Simon sent me last night.

The dollar index, which opened at 79.36...was up 5 basis points by 8:30 a.m. in New York.  Two hours later, it was at 79.13...which was its low tick of the day.  From that low, such as it was, the index recovered almost all of its gains, closing down only 3 basis points from its Thursday close.

To hang all of the precious metals price action during the New York trading session on this little blip in the dollar index would be pushing the bounds of credulity to its limits.

Although opening in the red, the gold stocks rallied until the gold price rolled over at 10:30 a.m. Eastern...and the precise moment that the dollar index turned upwards.  How cute is that?  From there, the gold stocks drifted lower until the 3:15 p.m. gold rally...and closed slightly off their lows.  The HUI finished down 0.93%.

It was no surprise that the silver stocks got sold off as well but, considering the damage done to the silver price, the decline was pretty mild...and Nick Laird's Silver Sentiment Index closed down only 1.37%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 80 gold and 28 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  It was Jefferies and ABN Amro as the only two short/issuers...and JPMorgan and the Bank of Nova Scotia as the only long/stoppers. In silver, it was Jefferies and Deutsche Bank as issuers...and the Bank of Nova Scotia and Jefferies as stoppers.  The link to that activity is here.

There were no reported changes in either GLD or SLV.

The U.S. Mint had a tiny sales report.  They sold 1,500 troy ounces of gold eagles...and that was it.

Over at the Comex-approved depositories on Thursday they reported receiving 702,262 troy ounces of silver...but only shipped 174,075 ounces of the stuff out the door.  The link to that action is here.

Well, the Commitment of Traders Report...for positions held at the 1:30 p.m. Eastern time close of trading on Tuesday, October 2nd...was uglier than even I imagined it could have been.

In silver, the Commercial net short position increased by an eye-watering 6,181 contracts, or 30.91 million ounces during the reporting week.  The Commercial net short position now stands at 289.2 million ounces.

Ted Butler told me that, of those 6,200 contracts, the raptors sold about a thousand of their remaining long positions...and the '5 through 8' traders added another thousand contracts to their short positions.  But it was the 'Big 4' that sold the rest...about 4,200 contracts worth.  Ted said that JPMorgan is now short 34,000 Comex silver contracts...170 million ounces. 

The 'Big 4' are short 258.0 million ounces of silver...and JPMorgan is short 170 million of that amount all by itself.  The '5 through 8' traders are short an additional 51.4 million ounces.  In total, the 'Big 8' bullion banks are short 309.4 million ounces of silver...about 150 days of world silver production!

On a net basis, once all the market-neutral spread trades are removed from the Non-Commercial category...the 'Big 4' are short 45.6% of the entire Comex silver market...and the '5 through 8' are short an additional 9.1% of the Comex silver market.  So, adding it all up, the 'Big 8' are short 54.7% of the entire Comex futures market in silver...and JPMorgan is short more than 30% of that all by itself.  These are minimum numbers as well.  One trader is short almost a third of the entire futures market in silver. ONE TRADER!!!!  Where the #$%& are the regulators???

In gold, the Commercial net short position increased by 'only' 6,915 contracts, or 691,500 troy ounces of gold.  The Commercial net short position now stands at 26.93 million ounces of gold.  But it's what went on under the hood that matters.  Ted Butler said that the raptors bought back [at a loss] about 5,000 contracts of their gargantuan short position...and the 'Big 4' went short an equal amount, plus a couple of thousand more, to prevent the price from blowing sky high as the raptors covered...and the '5 through 8' accounted for the other 5,000 contracts sold short.

The 'Big 4' are short 16.83 million ounces of gold...and the '5 through 8' traders add another 6.01 million ounces to that total.  The 'Big 8' bullion banks are short 22.84 million ounces of gold.

In percentage terms...and on a net basis...the 'Big 4' are short 37.1% of the Comex futures market in gold...and the '5 through 8' are short another 13.2 percentage points.  Add it all up, and the 'Big 8' are short 50.3% of the entire Comex futures market...almost as bad as their collective short position in silver, which is 54.7 million ounces.  How obscene and grotesque can you get?

Through all of this...the regulators and your precious metal companies...see nothing, say nothing...and do nothing!

Here's Nick's "Days of World Production to Cover Comex Short Positions" updated with Tuesday's COT data.

(Click on image to enlarge)

And don't forget when looking at the green and red gars for silver, that JPMorgan is short about 85 days of world production all by themselves...and two thirds of the red bar and over half of the green bar.  How's that for a concentrated short position?

Here's the first of several charts.  This one is from Washington state reader S.A...and requires no further embellishment from me.

(Click on image to enlarge)

This is a chart that reader David Schonbrunn sent me yesterday evening.  He borrowed it from a report by Jurrien Timmer posted over at Fidelity.com on September 16th.  I'd seen the chart on the Internet before, but hadn't posted it in this space until David sent it to me just now.

(Click on image to enlarge)

As usual, I have a lot of stories for your weekend entertainment, so I hope you can find the time to indulge yourself in the ones that are of the most interest to you.

That's not the pressing issue at the moment. It's the obscene, grotesque and utterly dangerous situation that exists in the silver market
James Turk: Determining the value of gold. Gold, mourning and dragons; from India to China. Gold outperforms London mansions. JPMorgan is short almost one third of the Comex silver market.

Critical Reads

Presidential Debate Aftermath: Mitt Romney Wins All-Important BS Contest

Ed_GSD
October 6, 2012 1:20pm GMT

I didn't watch the debate – I just couldn't. I read it in transcript form afterwards. I know it is widely believed that Mitt Romney won, but I don't agree. I think both candidates lost. I think they both sucked. Romney told a series of outright lies – the bit about the pre-existing conditions was incredible – while Barack Obama seemed unaccountably disinterested in the intellectual challenge of the exercise, repeatedly leaving the gross absurdities hurled his way by Romney unchallenged.

Romney's performance was better than Obama's, but only if you throw out criteria like "wasn't 100% full of shit from the opening bell" and "made an actual attempt to explain who he is and what his plans are." Unfortunately, that is good enough for our news media, which drools over the gamesmanship aspects of these debates, because it loves candidates who sink their teeth into the horse-race nonsense that they think validates their professional lives.

If you read the rest of this Matt Taibbi rant, you might figure out what he really thinks.  It was posted on the Rolling Stone website yesterday afternoon Eastern time...and I thank Roy Stephens for our first story in today's column.  And as you've already discovered, the usual disclaimer about Matt's 'pithy prose' applies.  The link is here.

Jack Welch questions jobs numbers

Ed_GSD
October 6, 2012 1:20pm GMT

The big drop in the unemployment rate a month before the presidential election brought cries of disbelief and conspiracy theories from Jack Welch and other critics of the Obama administration Friday. But the Labor Department was quick to dismiss such claims.

"Unbelievable jobs numbers...these Chicago guys will do anything...can't debate, so change numbers."

Welch did not respond to a request for further comment. In an interview later in the day on MSNBC, he admitted that he had no evidence that the jobs numbers were manipulated, but said they "defy logic."

This story was posted on the money.cnn.com Internet site early yesterday evening...and I thank Washington state reader S.A. for sending it along.  The link is here.

Rosenberg: I Don't Believe In Conspiracy Theories, But I Don't Believe In Today's Jobs Report Either

Ed_GSD
October 6, 2012 1:20pm GMT

Headline numbers from today's jobs report looked great. Unemployment fell to 7.8 percent, non-farm payrolls came in line with expectations, and last month's number was revised up.

This prompted some to claim the numbers were made up. President Obama said, "this morning we found out that the unemployment rate has fallen to its lowest rate since I took office."

But Gluskin Sheff's David Rosenberg didn't paint such a rosy picture of the report and had a very specific response to any such claim: "That the 7.8 percent jobless rate takes it to the level that prevailed when the President took office in January 2009 has raised many an eyebrow. I don't believe in conspiracy theories. But I don't believe in the Household Survey either. 

David may have been born at night...but it wasn't last night.  This businessinsider.com story was posted on their Internet site during the lunch hour in New York yesterday...and I thank Roy Stephens for his second offering in today's column.  The link is here.

Gas Prices In California Are Out of Control, More Stations Now Charging $5 a Gallon

Ed_GSD
October 6, 2012 1:20pm GMT

Refinery outages and a unseasonably warm weather caused gas prices to shoot up by 20 cents a gallon overnight in California, prompting some stations to close and others to charge more than $5 a gallon, the AP reports.

Temperatures are expected to head up to at least 79 degrees in L.A., while production disruptions linger at local Chevron and Mobil refineries, according to USA Today.

GasBuddy is registering an average price of $4.53 this morning for the state, near the record of $4.61 from June 2008.

This story is an update of a similar story I ran a couple of days ago...and it's obvious that gas prices have risen substantially since then.  You've already read the entire 3-paragraph Bloomberg story...and the link to the hard copy is here.  I thank Roy Stephens for sending it.

Doug Noland: You Can Intimidate Everyone

Ed_GSD
October 6, 2012 1:20pm GMT

There's a lot that will likely go really wrong in Europe, perhaps even in the short-term.  Greece is an unmitigated disaster, and Spain is running a close second.  There was further dismal economic news this week, most notably from France.  But that hasn't in the least diminished recent keen speculative interest in European debt.  Indeed, after the Fed sold its soul, I've often believed that the speculators became adept at recognizing periods of rising systemic stress and market vulnerability as opportunities to load up on Treasuries and MBS.  And then it becomes a game, "OK Federal Reserve, make the value of these securities (or spread trades) go up or we'll dump them."  They've haven't had to dump.  The ECB has similarly opened itself up to blackmail.  "Be ready with the OMT as promised - or we dump."  "Spanish and Italian politicians, play ball or we'll dump."  "Mr. Weidmann and the Bundesbank, step in line - or we dump!"  "All policymakers everywhere, play or we dump."  At least in Europe, this is developing into one fascinating multifaceted game of chicken.

Well, I've been ranting for awhile now about the "biggest Bubble in the history of mankind." At this point, things increasingly remind me of 1999 and 2006.  Bubble Dynamics eventually reached a degree of excess that was too conspicuous to deny.  Yet the stakes are so much greater today.  The amount of global debt is so huge and the quality so poor.  It's completely systemic and global.  Dangerous excesses have gravitated to the core of Credit and monetary systems.  Policymakers are now "all in" in a desperate gambit to hold financial and economic fragility at bay.  And, dangerously, highly speculative markets seem determined to extend their divergent path from economic fundamentals.  It's frightening how enormous and enormously powerful dysfunctional global markets have become.

As always, Doug Noland's Credit Bubble Bulletin is a must read every Friday...and yesterday's epistle is no exception.  I thank reader U.D. for sending it my way...and the link is here.

How Helicopter Ben Helps Jobs and, Inadvertently, Gold

Posted: 06 Oct 2012 04:20 AM PDT

Frank Holmes, CEO and Chief Investment Officer
U.S. Global Investors, writes:

The world's central bank leaders continue to spike the monetary punch bowl, with investors imbibing on gold once again. This flurry of gold buying prompts many curious investors and doubting media to ask me two questions: 1) How can demand for gold and gold stocks continue; and 2) How high can the precious metal go?

To answer these questions, we need to look at the intentions behind the economic and political decision-making across several developed countries, analyze the causes, the effects, and the possible ramifications.

For example, one of the most debated topics today is America's ongoing unemployment situation. Job loss has affected the lives and pocketbooks of millions of Americans and our friends and families, culminating to a center-stage position in the election this year. All eyes turn to President Barack Obama and Mitt Romney to explain how each intends to create jobs.

During the two years following the Great Recession, Americans lost jobs at a similar rate to the employment losses during the Great Depression and in Finland after 1991. But two years after the crisis, U.S. employment losses stopped and reversed direction.

Compare this to the situations in Norway, Spain, Finland and Sweden, each of which had prolonged unemployment. After Norway's financial crisis in 1987, it took 8.5 years to return to the country's employment peak. It took 13 years for Spain's employment to return to its 1997 peak. For Finland and Sweden, it took more than 17 years following their 1991 peaks.

Employment Loss

Although the job losses in the U.S. don't seem as dismal, "Helicopter" Ben Bernanke wants to avoid Europe's and Japan's catastrophic situations. To him, the economy "has not been growing fast enough recently to make significant progress in bringing down unemployment."

Helicopter Ben - U.S. Global Investors

In a speech to the Economic Club of Indiana on October 1, Bernanke explained that the Fed is "charged with promoting a healthy economy," which includes "an economy with low unemployment, low and stable inflation, and a financial system that meets the economy's needs for credit and other services." With regards to the decisions relating to monetary policy, the Fed's goals are dictated by Congress and are to seek "maximum employment and price stability." He explains, "We would like to see as many Americans as possible who want jobs to have jobs and that we aim to keep the rate of increase in consumer prices low and stable."

Ten years earlier, Ben hinted at the way he might accomplish such goals as a Fed chairman. In a speech regarding deflation, he shared his position on a government's means to print money, referring to Milton Friedman's comment about dropping money out of a helicopter into the economy. He stated, "The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." Since then, he's been known as "Helicopter Ben."

With unemployment continuing, the Fed's helicopter drops another $40 billion per month to buy mortgage-backed securities, as well as an additional $45 billion of longer-term securities per month through the end of the year.

And, as Bank of America-Merrill Lynch says, "monetary policy is contagious." The Fed's money printing practice to help create jobs is only one part of the picture. Along with the growing U.S. monetary base, global liquidity has been growing every year for the past 12 years. As you can see, both of these factors have a close correlation to the rise of gold.

Global Liquidity

While well-intentioned, I believe these "quantitative infinity" programs may have a devastating devaluing effect on currencies, which has helped to spur gold prices over this entire time period.

Gold investors have recognized this correlation by returning to gold en masse. In August, investors rushed into gold, with the massive inflows of money going into the gold exchange traded products in August more than each of the prior five months.

Buying continued in September, with gold lovers loading up on coins. According to Bloomberg, people purchased the most American Eagles from the U.S. Mint in eight months. Almost 70,000 ounces were sold last month—the most sold since January when the U.S. Mint sold 127,000 ounces.

Miners also attracted interest, with the FTSE Gold Mines Index experiencing a rise of 13.25 percent and the NYSE Arca Gold Miners Index rising 12 percent during the month of September alone.

So how high can gold go? If you factor in only the Fed's program to purchase mortgages and Treasuries, Bank of America-Merrill Lynch says that over the next nine months gold could go to $2,000, and by the end of 2014, gold could be at $2,400.

FED Balance Sheet

This target doesn't take the Love Trade into consideration. Over the past several months, we've heard only chirping crickets from India, the country that has historically been the world's largest consumer of gold. Demand suffered under a very weak rupee, as the price of gold in the local currency climbed to an all-time high.

The rupee's recent strength has helped to increase Indian gold demand with flows climbing to a five-month high, according to UBS. What's helped bring shoppers back to the market is the fact that the exchange rate is back to where the rupee was in April.

This improvement in the currency comes just in time, as the wedding season is in full bloom. Every year, about 10,000 weddings are held in India from late September through January, in between the monsoons and the summer heat. Gold has historically been closely linked with the celebration of weddings, as the bride wears the precious metal and gifts of gold coins are given to the newlyweds.

In addition, Diwali will be celebrated in November. The Festival of Lights is India's biggest and most important holiday of the year and is celebrated by almost 1 billion Hindus around the world. Traditionally, on the first day of Diwali, it is considered auspicious to clean the home and shop for gold.

Why is India so significant to gold? As you can see below, from 2000 through 2011, the rising incomes in both China and India have been strongly correlated to the price of gold.

Strong Correlation China India Incomes Gold Price

Investors now have two strong reasons to invest in gold: the Fear Trade, driven by an expanding monetary base, and the Love Trade, driven by rising gold demand in Chindia. If you're already sold on gold, make sure to maintain a modest 5 to 10 percent weighting in gold and gold stocks. For those investors who aren't in gold, what's stopping you?

October 5, 2012 (Source: U.S. Global Investors)

http://www.usfunds.com/investor-resources/investor-alert/

Links 10/6/12

Posted: 06 Oct 2012 03:55 AM PDT

It's Friday – need some help concentrating at work? Have a look at this picture… Independent (Catperson). Hah!

A Spy-Gear Arms Race Transforms Modern Divorce Wall Street Journal

Black mamba venom is 'better painkiller' than morphine BBC

Foxconn workers on strike over iPhone 5 production, labor group says IT World

Cybercrime Gang Recruiting Botmasters for Large-Scale MiTM Attacks on American Banks ThreatPost

World food prices near crisis levels Reuters

The IMF -Inadvertently- Condemns The Eurozone Illargi

Moody's warns on Portugal's bailout plan Financial Times

Greek Prime Minister Warns of Societal Collapse Like Weimar Germany; Citizens Storm Defense Ministry; Merkel Takes Gamble on Visiting Greece Michael Shedlock

The Delusion of Limited Intervention in Syria Bloomberg

Repo Man Envy, Argentina-Elliott Edition Anna Gelpern, Credit Slips

Obama's Debate: What the Fuck Did You Expect? Gawker (Ep3)

The Peril of Obama's "Man Crush" on Geithner is exposed by the Debate Bill Black, New Economic Perspectives

The painful lessons of the Central Park Five and the jogger rape case Guardian. An important read if you care about criminal justice. This case was front page news for months.

Why California's Gas Price Nightmare Could Last For Weeks Clusterstock

Back to $chool Andy Kroll, Tom Engelhardt (1 SK)

Schneiderman Signed Tolling Agreements With MBS Issuers to Extend Statute of Limitations Dave Dayen, Firedoglake

Treasury Report Reveals Performance of Largest Servicers DSNews (Lisa Epstein). Yes, all is now officially fine in loan mod land.

Foreclosure mills in the clear, state closes cases with no findings Palm Beach Post

Unemployment Falls Below 8.0 Percent for the First Time Since January 2009 Dean Baker

Prescription for Addiction Wall Street Journal

Also, we are working towards getting our tech issues addressed. Our tech guy will be working on the configuration this weekend, which hopefully will remedy some of the problems you have been experiencing. We are also looking at other types of solutions in parallel, but they will probably take longer to implement.

Finally, it would help me if you'd tell me what you like about Naked Capitalism because I'm trying to structure my work for next year. One conundrum I continue to wrestle with is how large the range of possible NC topics has become and how to choose which ones to pursue. In a perverse way, the crisis was much easier. The major stories seemed to have two week to three month cycles, with beginning, middles and endings. In the wake of the crisis, it's as if someone threw a very large rock into a pond, and the impact, the concentric circles, just keep widening and widening. Any input here would be very much appreciated.

* * *

lambert here:

Mission elapsed time: T + 28 and counting*

That which is crooked cannot be made straight: and that which is wanting cannot be numbered. –Ecclesiastes 1:15

Readers, I'm a little over capacity this evening, what with trying to put a stake in the heart of a project. So I thought do a recap on the Social Security flap from last week's debate between Obama and Romney. Spoiler alert: There's nothing new here, but that's not necessarily a good thing.

I actually had a lead written: "Long, long ago, in a primary far away, there was a candidate who needed an issue. His name was Barack Obama." I thought that was pretty funny, because I started to pay close attention to Obama when he put Social Security "in play" in the 2008 Iowa primaries (and as a "character issue," too, to add insult to injury). As Atrios remarked (October 27, 2007) at the time (citing Drum): "I appreciate that Obama needs an issue, but please don't put social security into the Washington water. Once it gets in there all the serious pundits spend their days figuring out how best to starve granny." (Readers: Notice that "zombie-eyed granny starver" has a pedigree, and it's bipartisan.) I say "in play" because Democrats, with perhaps an assist from what we then thought of as the left blogosphere, had just finished beating George W. Bush like a gong for trying to privatize Social Security, and we thought Social Security was off the table. Atrios — he's a professional economist! — explained (October 29, 2007): "So, anyway, having someone suggest that Social Security is a problem which needs to be dealt with by any serious candidate is like the bat signal for people like me. There is no problem with Social Security. None at all" (italics mine. Well, every reason, if you want to dogwhistle Republicans, but that's a thread for another day.) Anyhow, I parsed Obama's words carefully from then on, and ultimately left the Party, but that's another thread for another day, too. "Class of" 2008. I know, way too late!)

Anyhow, that lead didn't work out, because here's Obama on on ABC's "This Week with George Stephanopoulos on May 13, 2007, well before Iowa. Which I missed, because I was too busy beating up on Republicans to pay attention to the good guys (hollow laughter):

STEPHANOPOULOS: You've also said that with Social Security, everything should be on the table. OBAMA: Yes. STEPHANOPOULOS: Raising the retirement age? OBAMA: Everything should be on the table. STEPHANOPOULOS: Raising payroll taxes? OBAMA: Everything should be on the table.

So Obama's been willing to gut Social Security for some time. Aren't they all? Fast forward to last week's Presidential debates. October 3, 2012:

OBAMA: "You know, I suspect that on Social Security, we've got a somewhat similar position."

Remarkably, or not, Obama agreed with Romney on Social Security before Romney had taken a position in the debate (although by this point Romney had dragged Big Bird to the chopping block by his scrawny neck, which might have been a clue). What could possibly have been the basis for Obama's suspicion? Rather than take my blogger's tin shovel to the ginormous pile of impacted yet steaming dung and leachate that is our legacy party discourse, let me just take the Republican platform (undated, and, in the proprietary PDF format, unlinkable, so classy) as a proxy for Romney's views:

"While no changes should adversely affect any current or near-retiree, comprehensive reform should address our society's remarkable medical advances in longevity and allow younger workers the option of creating their own personal investment accounts as supplements to the system."

Well, that's clear enough: A two-tier benefit system, with a measure of privatization. It's also similar to the White House position ("check the web site!"), which is presumably a reasonable proxy for Obama's position:

Seniors and Social Security

He [Obama] believes that no current beneficiaries should see their basic [meaning?] benefits reduced and he will not accept an approach that slashes [reduces OK, then?] benefits for future generations. The President also stands firmly opposed to privatization and rejects the notion that the future of hard-working Americans should be left to the fluctuations of financial markets.

So, Obama, the Republican Platform, and the White House are all agreed that the future of Social Security will be a two-tier system. In the debate, what did Romney have to say?

ROMNEY: "[N]either the president nor I are proposing any changes for any current retirees or near retirees, either to Social Security or Medicare. So if you're 60 or around 60 or older, you don't need to listen any further. But for younger people, we need to talk [dread words!] about what changes are going to be occurring."

Romney too. So, that to me is what the debate boils down to, and it's not news: A two-tier system of Social Security, with the battle to be fought out over privatization. (And you can bet that the battle, despite the White House's brave deceptive words, won't be about whether, but about when, how, and how much. After all, when you've mandated that people go on the market for a health exchange, why not mandate they go on the market for a retirement exchange? (Heck, a body organ exchange, but that might be carrying the good thing of a market state too far.))

How the young are going to handle both privatized retirement and massive debt is an open question, but no doubt the confidence fairy or the magicians of the marketplace have a ready answer.

One could wish that the entire debate was not framed as "I've got mine" — as Romney gracefully puts, "you don't need to listen any further" — "now you get yours," since, after all, what the legacy parties are doing, by advocating a two-tier system, is encouraging elders to betray their own children and grandchildren to age without dignity when their time comes. What a degraded, debased, vile, repellent, and let's-just-go-ahead-and-call-it-evil political class we have today, to be sure. And yet, they think they know us so well, trying to work this con. Let's hope they're wrong.

* Slogan of the day: Forward to Shared Sacrifice With The Obama!

* * *

Antidote du jour:

5 Stocks With Insider Buys Filed On October 5 To Consider

Posted: 06 Oct 2012 02:39 AM PDT

By Markus Aarnio:

I screened with Open Insider for insider buy transactions filed on October 5. From this list, I chose the top 5 stocks with insider buying in dollar terms. Here is a look at these 5 stocks:

1. Wausau Paper (WPP) produces and markets specialty papers for industrial, commercial and consumer end markets as well as a complete line of away-from-home towel and tissue products.

(click to enlarge)

Insider buys

Starboard Value LP purchased 250,000 shares on October 3-5, 742,327 shares on September 21-25, 82,673 shares on September 4-5 and 350,000 shares on August 16-17. Starboard Value LP currently controls 6,850,000 shares of Wausau Paper. Wausau Paper has 49,322,921 shares outstanding, which makes Starboard Value LP a 13.9% owner of Wausau Paper.

Financials

The company reported the second-quarter financial results on July 30 with the following highlights:

Revenue $212.9 million
Adjusted net earnings per share $0.09
Cash $33.1 million

Outlook

Henry


Complete Story »

Gold And Silver - Financial Body Armor For Your Portfolio Against Inflation

Posted: 06 Oct 2012 12:29 AM PDT

ByAustin Craig:

Gold and Silver... consider these precious metals kin to an insurance policy written not for a future car wreck, but rather insuring you against future financial calamities - perhaps as financial body armor for your investment accounts. Today's economy is certainly volatile, chock full of uncertainty and unpredictable events. When times get tough, the metals offer you protection against mayhem.

Consider events challenging our financial markets (which cause gold and silver to appreciate in value); how much to hold of the metals; where to buy them; and in what form (Physical, Stocks, ETFs).

This article is not to come off as alarmist, but rather to provide guidance on real issues affecting today's investors. Think of it as: Metals against Mayhem.

Catalysts for the Rise of Gold and Silver

When we look at the overall picture of issues facing our 2012 economy, we can picture economic forces and pressure much like


Complete Story »

Family Dollar Stores - Long-Term Appeal After The Company Guides For Strong Future Earnings Growth

Posted: 06 Oct 2012 12:12 AM PDT

By Robert Broens:

Shares of Family Dollar Stores (FDO) rose almost 4% in Wednesday's trading session. The operator of a chain of general merchandise retail stores reported its fourth quarter and full year results for 2012.

Fourth Quarter Results

Family Dollar Stores reported fourth quarter revenues of $2.36 billion, up 10.8% on the year. Revenues came in line with analysts' expectations.

Net income for the final quarter came in at $80.9 million, up from $79.8 million compared to last year. Net income per diluted share rose 4.5% to $0.69 per share, as a result of share buybacks. Earnings were impacted by a litigation charge of $0.06 per share. Non-GAAP earnings per share of $0.75 per share, came in line with the company's guidance of $0.71-$0.81 per share, issued in June.

For the full year of its fiscal 2012, the company reported sales of $9.33 billion, up 9.2% on the year. Net income per


Complete Story »

70 Second Market Outlook – Metals, Dollar, Bonds, Stocks, Energy

Posted: 06 Oct 2012 12:10 AM PDT

GoldandOilGuy

Next Dollar Gold Target $2,400 by Mid-2013

Posted: 06 Oct 2012 12:01 AM PDT

Links for 2012-10-05 [del.icio.us]

Posted: 06 Oct 2012 12:00 AM PDT

Fed QE and Gold, Silver

Posted: 05 Oct 2012 11:54 PM PDT

The Bacteria That Produces Pure Gold!

Posted: 05 Oct 2012 11:38 PM PDT

Perth Mint

Turkey & Syria Clash and Asians Take a Shine to Silver

Posted: 05 Oct 2012 11:32 PM PDT

gold.ie

Is War with Iran Inevitable?

Posted: 05 Oct 2012 11:22 PM PDT

In light of the reader interest in the post yesterday on the impact of sanctions on Iran's strategic options, this Real News Network interview provides a useful, if sobering, follow on (hat tip charles sereno). Lawrence Wilkerson describes which constituencies in the US, Iran, and Israel regard a conflict in their best interest, and how the evolving drama reminds him of the march towards war in Iraq.


More at The Real News

But is the focus on Iran misplaced? Reader Antifa pointed out yesterday that a much bigger shoe may drop before the escalating conflict with Iran reaches a critical stage:

For the record, the "Straights of Hormuz" is a cross-dressing barbershop quintet based in Dhubai who put on quite an entertaining show at private dance and drinking parties for the wealthy cosmopolitans of the Muslim world. Risque Islamic humor and a bit of burlesque. You know: a few well-turned ankles, a glimpse under the burkha. The usual. They'd do great in Vegas, only with less fabric.

Oh yeah, they're all five flaming gays but no one cares. It's all good while the money and the bubbly flows. Kind of reminds me of Berlin the year before the Reichstag caught fire.

On the other hand, the "Strait of Hormuz" (singular — there's only one) is a very narrow waterway through which most of the Middle East's oil ships in great, hulking supertankers. It's not as entertaining as the Straights, but performs admirably as a bottleneck for the lifeblood of Western economies.

Along the entire Iranian shoreline of the Persian Gulf leading up to the Strait are the formidable Atlas Mountains, a desert warren of smuggler's routes, caves, tunnels and tens of thousands of places to stage ambushes of all sorts. Truly a godforsaken, dried out wasteland of steep slopes, snakes, scorpions and hidey-holes. No army in the world could put enough people in there to police it, to keep it from being a perpetual hornet's nest of missile-launching Iranian patriots forever and ever, Amen.

No military vessel of any kind could survive 24 hours in the Gulf or threaten Iran from there in any way. Lloyd's of London would not insure a single oil tanker going there, so none would. Please note that only one Iranian patriot need sink only one tanker, with one missile, to bring all shipping to a complete halt, compliments of Lloyd's. Nobody ships without insurance, and insurance would be unobtainable.

The real risk of war and instability in the Middle East lies not with gay crooners nor sanctions nor imaginary Iranian nukes nor Israel's psychotic ambitions for Lebensraum. (Wherever do they get such notions?)

It lies in the imminent collapse of the Saudi monarchy due to political decrepitude and mortal age. There are nothing but very old men in the line of succession, and over half the Kingdom's male population is under the age of 15 — and half of those are unemployed as a permanent condition. Wards of the state, literally.

When the Kingdom falls in the next few years, it will be impossible to stop the popular will of the Saudi people for an Islamic state. Nor can American or other Western troops set foot there to forcibly establish a friendly regime. That would be an unforgivable blasphemy upon the land of Mecca. So we won't be invited to the party, as in Libya.

The other popular will of the Wahabi Islamists will be to take on Iran, the den of the Shia dogs and infidels. Iran will be delighted to return the sentiments and activities. There will be no lasting peace between Sunni and Shiite fundies. It will very much get in the way of shipping oil in our direction.

Saudi Arabia is where the collapse is going to come from, and it will be overnight, most likely.

Everyone over there knows it's coming, knows the false stability and prosperity of recent decades is hanging by a thread. The Straights even have a cute little ditty about it called "Wahabi Crude." And those of you who've heard them sing it know that it is. But then, that's their forte.

The Straights are just divine.

Gold...Technical Update of ...

Posted: 05 Oct 2012 11:21 PM PDT

Golden Secrets (III) Yamashita’s Gold

Posted: 05 Oct 2012 11:00 PM PDT

Golden Secrets (IV) The Chinese Imperial Gold

Posted: 05 Oct 2012 11:00 PM PDT

TheDailyGold Premium Model Portfolio Hits All-Time High

Posted: 05 Oct 2012 10:24 PM PDT

In the past few days, TheDailyGold Model Portfolio reached a new all time high even though GDX and GDXJ remain well below their all time highs. As of Friday's close, the portfolio was up 31.9% YTD compared to a 0.5% YTD gain for GDXJ, our benchmark. GDX is higher by 4.3% YTD.

Since January 2011, just weeks after the cyclical bear market in gold shares began, the portfolio is up by 23.3% while GDXJ is down 34.7% and GDX is down 12.5%.

Since all newsletter writers who focus on precious metals stopped publishing and advertising their performance (with the exception of John Doody), it is reasonably safe to say that TheDailyGold Premium has been the top performing gold-related newsletter this year and perhaps since 2011.

How do we do it?

First, we have a strict set of seven or eight rules that guides our participation in this sector. We shared these at the Toronto Cambridge House conference and have shared them with subscribers.

Secondly, we focus on market timing and stock selection. Our technical background is well known and unmatched by most of our competitors. This gives us an advantage. Furthermore, we combine technical and fundamental analysis in hopes of finding the big winners.

We work for our subscribers. We understand that we won't grow unless we make our subscribers money. That is our number one goal and is why we are extremely diligent. Of course, past performance is no guarantee of future performance. We will continue to strive for excellence for current and for new subscribers.

Learn More About Our Service & Subscribe

By the Numbers for the Week Ending October 5

Posted: 05 Oct 2012 09:13 PM PDT

This week's closing table is just below.  

20121005-Table

(Edit Oct 6 10:08 CT to correct several typos.  Apologies for the blunder.) 

Sinclair says gold will soar when you sell

Posted: 05 Oct 2012 08:52 PM PDT
at

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