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- High gold prices push India's farmers toward silver
- Indian gold imports surge amid fears of further duty hikes
- MDM wins ABG Bulyanhulu gold mine plant expansion project
- Gold: Yes, It Will Drop. No, Don't Short It.
- The Real Economy Vs. The Ivory Tower: Does Charles Plosser Live On Mars?
- Sign the White House petition to audit the U.S. gold reserve and track its ownership
- Energy= Money, & the Supply is Plunging
- Patrick Heller: Bullion delivery delays worsening
- More on Gold Confiscation
- Why Make A Trillion When We Could Make…Billions?
- Bloomberg Caught Falsifying Gold Chart to Discourage Investment in Gold
- Guest Post: The Value of Silver by MiningStockValuator.com
- 2013 Gold & Silver Outlook
- “There’s Going to be a Bubble in Gold and Silver…and a Super-Bubble in the Miners…So Buy Them Now”
- Here Comes the Gold & Silver Waterfall
- Trillion Dollar Platinum Coin Is “Not The Solution” – PIMCO's Gross
- JP Morgan pimps out gold to suckers with a new, dubious gold-derivatives piece of s***. Just buy physical, people.
- 'Campaign against Gold has Failed,' says Think-Tank
- Trillion Dollar Platinum Coin Is 'Not The Solution'
- Cometh the hour, cometh the bond collapse
- Positive Contagion from China & Europe Boosting Gold
- When to Invest in Gold
- Doug Casey: "There's Going to be a Bubble in Gold and Silver...and a Super-Bubble in the Miners...So Buy Them Now"
- To "The Precious Metal Purchasing Act" From Executive Order 6102 - Santelli's Take
- Even on CNBC, call us anything, just not late for dinner
- Two King World News Blogs
- Asian gold buying to the bulls’ rescue
- 14 Carrots for Bullion
- UBS Risk Management Fiasco Illustrates Hidden Big Bank IT Time Bombs
- How to Invest Like a Merchant Bank in High-Risk Resources: Rick Winters
- Fear Index December 2012: No Free Lunch
- Gold recovers to $1,675 an ounce as Chinese inflation hits 2.5%
- The Federal Government Hands Out Money To 128 Million Americans Every Month
- Price of Gold “Surprisingly Low” as Chinese Trade Surplus Jumps Ahead of New Year
- Commodity Technical Analysis: Gold Testing Near Term Trendline Resistance
- USA dollar tumbles as Euro rises to 1.3252/Spanish 10 year bonds fall in yield to below 5%/Greek unemployment skyrockets to 26.8%/Italian bad loans rise 16.7% to 121.7 billion euros/
- Riverstone Resources Corporate Update
- Draghi Comments; Markets Party
- Hedge Bombs
| High gold prices push India's farmers toward silver Posted: 11 Jan 2013 05:43 PM PST Silver artifacts and jewellery have made their way into farmers' hearts and homes across India as a cheaper alternative to the more expensive gold for investment purposes. |
| Indian gold imports surge amid fears of further duty hikes Posted: 11 Jan 2013 12:17 PM PST Jewellers say they will shut up shops in protest if the government further raises import duties on the precious metal and warn that smuggling will likely grow as a result. |
| MDM wins ABG Bulyanhulu gold mine plant expansion project Posted: 11 Jan 2013 11:58 AM PST African Barrick Gold has now awarded the EPC contract for its 2.4 million tonne/year Bulyanhulu gold plant expansion in Tanzania to South Africa's MDM Engineering Group. |
| Gold: Yes, It Will Drop. No, Don't Short It. Posted: 11 Jan 2013 10:58 AM PST By I agree with my Seeking Alpha colleague (writing under the name "Macro Investor") that gold prices should move down in 2013, though I do not find all of the five reasons in that article compelling. For example, the increase in expected supply from mining, while real, is tiny compared with the amount of gold trading. Gold mine supply is forecast to rise by 3.4 million ounces in 2013 compared with 2012, whereas the average daily volume of gold traded in London alone was 19.3 million ounces in November 2012. And the "falling" gold demand in China seems to have been a statistical blip. It's true that imports were down in October 2012, to 47 tons, but they shot back up in November, to over 90 tons (chart from zerohedge.com): (click to enlarge) On the other hand, I would add a sixth reason to expect a correction Complete Story » |
| The Real Economy Vs. The Ivory Tower: Does Charles Plosser Live On Mars? Posted: 11 Jan 2013 10:45 AM PST By Dave Kranzler: The news release hit the tape right after the stock market opened this morning: "Philadelphia Fed President Charles Plosser said Friday there are some risks to inflation in the medium to longer run unless monetary policy is tightened more quickly than the Fed anticipated in its last statement" (LINK). The S&P 500 stock futures dropped 4 points on this and the precious metals went into typical cliff-dive mode, with March silver dropping 50 cents from the time the statement hit the tape to its low on the day. Plosser's remarks are either patently misleading or his view is derived from gross negligence in analyzing real world data, the latter flaw of which is typical of "ivory tower" economists and Fed officials. We can use short term trading strategies to take advantage of the effects on the market caused by deceptive and misleading comments by Fed officials who have Complete Story » |
| Sign the White House petition to audit the U.S. gold reserve and track its ownership Posted: 11 Jan 2013 10:32 AM PST GATA |
| Energy= Money, & the Supply is Plunging Posted: 11 Jan 2013 10:30 AM PST By SRSrocco: The one important aspect that the world has not yet grasped… is the decline of NET ENERGY. ENERGY is what allows the formation or growth of the money supply… whether that be gold & silver or fiat. Without the growth of energy… you can't grow your money supply and you can't PAY HIGH [...] |
| Patrick Heller: Bullion delivery delays worsening Posted: 11 Jan 2013 10:29 AM PST Gata |
| Posted: 11 Jan 2013 08:20 AM PST The following startling information was sent to me by my friend Ken. Thanks, Ken for digging this up for me. Bill Holter verified that the information is true!
Bloomberg's headline on Friday morning – "Gold Falls as Strengthening Dollar Encourages Investors to Sell." Gold is down $7.30 coming into New York. So just how much did the dollar gain? It's up a whopping 0.09 to 79.84, which is a gain of 0.001%, which in plain English ain't didly! This is typical of the lame MSM analysis of the gold and silver market. They never give you the right answers. They always avoid the obvious – the manipulation by JPMorgan, who controls the majority of the short positions on the COMEX. It would require a bit of 774 tonnes of silver to cover the entire SLV short position… more than twelve days of world silver production. In gold, the amount required to cover all short positions is 49.0 tonnes, about seven days of world gold production. That, my friends, is what's happening. That's the reason gold (and silver) are being held down, not some ridiculous "rise" in the dollar. Julian Philips has authored a series of five articles on gold confiscation. To sum up what he says in a few words, there is a good chance that gold will be confiscated and he can show you how to take steps, in advance, to bypass the process. He adds that if he's wrong, that's o.k. because you will still have your gold. All of us at Miles Franklin have given deep thought to the topic of confiscation. We do not buy it! Jim Sinclair's argument is that as long as China is urging her citizens to buy gold, the West can never confiscate. I brought the matter up with Sinclair again, this morning and his reply was essentially, don't waste my time with such prattle. If you are foolish enough to sell your gold because of what he is saying, you deserve the consequences. I asked Bill Holter and Andy Hoffman to come up with their thoughts on confiscation by Monday. We want to make our position perfectly clear. Frankly, one of the reasons I have my gold stored in a non-bank facility, Brinks, out of the country, in Canada, is to hedge my bets. I am two steps removed for a confiscation that I personally doubt will ever again happen. As long as the dollar is not gold backed, it makes no sense to go there. But, if the unlikely were to occur, in the very unlikely event that our government issues a recall order, they would want to get the most people possible to comply with the least resistance. Since they can create all the money necessary to acquire it, with a keystroke, it makes sense that they would offer a fair and very high price for the gold – and quite possibly even offer an extra incentive like a provision where no taxes were paid on the gains. This isn't so far-fetched since many people would be forced to liquidate outside of their own time frame and would face tax consequences that in some cases would not be to their benefit. If they didn't make it easy and somewhat fair, many people would flaunt the law and the government would NOT get their hands on the gold they desire. But all of this is mere conjecture; both the confiscation and my comments as well. Although not likely, it is possible and that is all the more reason to stock up on silver and platinum. That makes sense both as a hedge against gold confiscation and also a sensible way to diversify your gold holdings. Let's not get too paranoid about this. Phillips' articles make for interesting reading but if you were to ask long-time gold bugs like Richard Russell and Jim Sinclair what they thought, they would say not to lose any sleep over the subject. We, at Miles Franklin, still believe in gold and are comfortable selling gold and buying it for our own personal accounts. Remember, just because something is "possible" doesn't mean it will occur. Things would have to be literally falling apart for this to even be a topic of discussion. Although I am very bearish on the economy and the dollar, I don't see the world, as we know it, coming crashing down anytime soon. In the last bull market, in the late 70s, even as the dollar was under attack, and gold was going to the moon, there was no mention of confiscation. After Nixon closed the gold window and de-linked the dollar to gold, in August 1971, gold was off the radar screen. Until you see China or the EU announce that they are backing their currencies with gold, there is nothing to concern yourself with. If, however, gold does re-enter the picture as a mandated backing for currency, including the dollar, then that's a different story. I will re-visit my thinking then, but it won't happen anytime soon.
Similar Posts: |
| Why Make A Trillion When We Could Make…Billions? Posted: 11 Jan 2013 07:45 AM PST The final session of the week saw gold dipping sharply as a mild revival in the US dollar's strength prompted speculators to lock in short-term profits and sel. Friday morning's low was touched at $1,655 after the yellow metal lost nearly $20 an ounce and fell below its 200-DMA once...  |
| Bloomberg Caught Falsifying Gold Chart to Discourage Investment in Gold Posted: 11 Jan 2013 07:38 AM PST A reader has submitted evidence that Bloomberg falsified a gold price chart on air in January 2012 in order to discourage investment in the metal. During an on-air segment touting gold's extreme volatility, Bloomberg posted a monthly chart of gold … Continue reading |
| Guest Post: The Value of Silver by MiningStockValuator.com Posted: 11 Jan 2013 07:29 AM PST One of our site sponsors has been MiningStockValuator.com and you've likely noticed their ad on the right side of this homepage. As a service to the greater community, they've written this terrific article.      |
| 2013 Gold & Silver Outlook Posted: 11 Jan 2013 07:27 AM PST This analysis is excerpted from part of yesterday's subscriber update in which we presented our outlook for Gold, Silver and GDX/HUI. When making forecasts and writing outlooks, analysts must look at a multitude of things. We usually begin by examining the macro landscape via intermarket analysis. How are the various markets trending? Which are lagging? Where are the divergences? As we begin 2013, there has been an important shift in regards to precious metals that few analysts have picked up on. The rest of our analysis filters down from this discovery. We are speaking of the decoupling that has taken place between the equity market and the precious metals complex. This is significant because it began nearly 17 months ago. (Decouplings of three or six months are not significant). Since the Euro crisis in summer 2011, the equity market has rallied nearly 30% and reached a five-year high. During the Euro crisis both Gold and gold shares were trading at all-time highs. GPX, an index of precious metals prices, was at an all time high. Since that time, the gold stocks are down by more than 30%. This is what a decoupling looks like. It's not obvious over short periods but over long periods of time.
That is where the fundamentals come into play. At present, capital is moving out of bonds and into stocks. The consensus conventional view for 2013 is one of continued growth with a chance of increase but no threat of inflation. Yet, if interest rates rise the debt burden would increase dramatically due to the current huge debt load but low cost of service. If the cost of servicing $15 Trillion in debt is 2%, then a rise to 3% equates to an extra $150 Billion in interest expense. In other words, interest rates cannot be allowed to rise materially. At somepoint rising interest rates would become bullish for precious metals and bearish for the stock market. Moreover, if interest rates cannot effectively be managed downward, then that would be even more bullish for precious metals and bearish for conventional assets like bonds and stocks. Its important to note that both the economy and the equity market have little margin for error. The economy has picked up statistically in recent quarters and is getting some help from emerging markets. Yet, it is only churning along (like a camel in the desert) due to massive deficits and continuous debt monetization. At the same time, the equity market (S&P 500) is now at a five-year high and very close to massive resistance. In any event, it is very clear that the decoupling will continue. You must decide if and when the markets will shift. Turning to the technical outlook, we find Gold well entrenched in a consolidation. While momentum is turning higher, Gold is unlikely to breakout anytime soon due to the strong resistance at $1750-$1800. If Gold is able to firm up here and now then it has a good shot to rally back to $1750-$1800 over the next few months. If we get the bullish scenario and a fundamental catalyst shift then expect Gold to break past $1800 in Q3. That would mean that Gold consolidated for two years which would be its longest consolidation on record. The longer the consolidation, the more explosive the breakout. A breakout in the second half of 2013 (with momentum already rising) would bode extremely well for 2014.
Over the short-term it appears that the gold stocks are forming rounding bottoms. These are slow bottoms that take time to form. At the same time, the action in Gold and Silver is looking more and more constructive. Generally speaking, we see precious metals starting the year well and potentially finishing the year very well. However, do realize that while this could be the low for 2013, it could be many months before precious metals experience their next breakout. Conventional investments still have momentum and it will take some time for that relationship to shift. The bad news is, you are going to have to continue to be patient. The good news is we see this being the most explosive breakout since 2005 and you have plenty of time to try and identify the mining stocks poised to be big winners when this cyclical bull begins in earnest. If you'd be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our service. Good Luck! Jordan Roy-Byrne, CMT Gold Report Sign Up Below
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| “There’s Going to be a Bubble in Gold and Silver…and a Super-Bubble in the Miners…So Buy Them Now” Posted: 11 Jan 2013 07:26 AM PST Ed Steer's Gold & Silver Daily The gold price was flat during early trading in Hong Kong, but the moment the dollar index started to roll over, the gold price began to develop a positive bias during the late afternoon in the Far East…and into the London open. Gold got sold down a bit once the London noon silver fix was in…and was only up a couple of bucks when Comex trading began at 8:20 a.m. Eastern time. Then the dollar index took a tumble…and the gold price headed north. Almost all of the day's gains were in by 10:30 a.m. Eastern, even though the dollar index continued to decline at a pretty good clip after that. From there, gold traded flat…and then faded a bit in late electronic trading. Gold's low price tick of around $1,654 came early in Far East trading…and the high tick in New York was $1,680.10 spot. Gold finished the Thursday session at $1,674.80 spot…up $16.80. Net volume was fairly light at around 130,000 contracts. Continue Reading at CaseyResearch.com… Gold Report Sign Up Below
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| Here Comes the Gold & Silver Waterfall Posted: 11 Jan 2013 07:05 AM PST After trading up to the top of their recent respective trading ranges over most of the week, gold and silver were capped at $1680 and $31 overnight, and have just been treated to another waterfall decline. Silver was smashed .80 to $30.14, and gold nearly $25 to $1654. Silver Bullet Silver Shield Slave Queen [...] |
| Trillion Dollar Platinum Coin Is “Not The Solution” – PIMCO's Gross Posted: 11 Jan 2013 06:48 AM PST PIMCO founder and co chief investment officer Bill Gross gives no credence to the trillion dollar platinum coin scheme. "We feel that such an action would not only jeopardise the U.S. Fed and Treasury standing with Congress but with creditor nations internationally – particularly the Russians and Chinese." It appears to be a bit of [...] |
| Posted: 11 Jan 2013 06:33 AM PST JPMorgan Sells Largest Structured Note Tied to Gold Since 2010 |
| 'Campaign against Gold has Failed,' says Think-Tank Posted: 11 Jan 2013 05:53 AM PST Wholesale gold bullion prices dipped back below $1,670 an ounce Friday morning in London, 0.9% up on where it started the week, after jumping 1% yesterday following the European Central Bank's decision to leave interest rates on hold.  |
| Trillion Dollar Platinum Coin Is 'Not The Solution' Posted: 11 Jan 2013 05:32 AM PST Gold climbed $15.50 or 0.94% in New York yesterday and closed at $1,672.90/oz. Silver surged to a high of $30.926 and finished with a gain of 1.45%. The yellow metal was on track for a 1% weekly rise, after falling for five of the past six weeks.  |
| Cometh the hour, cometh the bond collapse Posted: 11 Jan 2013 05:23 AM PST Fed hawks worry about threat of inflation Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank's easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year. "I sold my … Continue reading |
| Positive Contagion from China & Europe Boosting Gold Posted: 11 Jan 2013 05:11 AM PST Comex gold futures jumped 1.36% on Thursday to reach $1,678/oz., gaining 1.76% this week. Better than expected Chinese exports data cheered the stock, gold and commodities markets.  |
| Posted: 11 Jan 2013 04:13 AM PST With gold posting its twelfth consecutive year in its current bull-run it may seem like an easy decision to invest in gold, but the question isn't exactly if, but when to buy gold bullion?  |
| Posted: 11 Jan 2013 03:15 AM PST ¤ Yesterday in Gold and SilverThe gold price was flat during early trading in Hong Kong, but the moment the dollar index started to roll over, the gold price began to develop a positive bias during the late afternoon in the Far East...and into the London open. Gold got sold down a bit once the London noon silver fix was in...and was only up a couple of bucks when Comex trading began at 8:20 a.m. Eastern time. Then the dollar index took a tumble...and the gold price headed north. Almost all of the day's gains were in by 10:30 a.m. Eastern, even though the dollar index continued to decline at a pretty good clip after that. From there, gold traded flat...and then faded a bit in late electronic trading. Gold's low price tick of around $1,654 came early in Far East trading...and the high tick in New York was $1,680.10 spot. Gold finished the Thursday session at $1,674.80 spot...up $16.80. Net volume was fairly light at around 130,000 contracts. Up until the Comex open, silver followed a similar path to gold's...and also giving away all its overnight gains once the London silver fix was in at noon GMT...and was virtually unchanged by 8:20 a.m. in New York. After surging in price during the first thirty minutes of trading, the silver price worked its way slowly higher up until 2:00 p.m. in the electronic market, before getting sold off a bit into the 5:15 p.m. close. Silver's low tick in early Far East trading was around 30.25 spot...and the New York high checked in at $31.05 spot. Silver closed at $30.86 spot...up 50 cents from Wednesday. Volume was decent at around 48,500 contracts. The dollar index opened at 80.61...virtually on its high of the day...and stayed slightly above that mark until around 2:00 p.m. in Hong Kong before a slow selloff began. This slow decline in the index lasted until 8:30 a.m. in New York...and then headed south with a vengeance from there. The low tick [79.69] came minutes after 2:00 p.m. Eastern...and then recovered a handful of basis points, closing the Thursday session at 79.79...down 82 basis points from Wednesday. Considering the magnitude of the decline in the dollar index, one should have expected bigger gains in the precious metals...because they would have certainly 'fallen' more than that if the index had risen that amount. The gold stocks gapped up at the open and then climbed steadily until around 10:15 a.m. in New York...and then crept higher for the rest of the day, selling off a hair during the last thirty minutes that the equity markets were open. The HUI finished up 2.31%. The silver stocks did pretty well on the day, but Nick Laird's Intraday Silver Sentiment Index was dragged down by the news out of Silver Standard Resources, so it only finished up 0.87%. (Click on image to enlarge) The CME's Daily Delivery Report showed that 9 gold and 11 silver contracts were posted for delivery on Monday from within the Comex-approved depositories. For the third day in a row, an authorized participant withdrew gold from GLD. This time it was 67,780 troy ounces. But SLV had its second deposit in a row, as an authorized participant added 677,141 ounces of silver yesterday. Well, the new updated short positions for both GLD and SLV for the end of December were posted on the shortsqueeze.com Internet site late last night. Both Ted and I were expecting/hoping to see big declines, especially in silver, since 6.0 million ounces were deposited in SLV during the reporting period. But, alas, it was not to be. The short position in SLV increased by another 2,892,600 shares/ounces...which works out to an increase of 13.15%. The short position now sits at 24,897,800 shares/ounces...and that translates into a short position 7.64% of all outstanding shares of SLV. The short position in GLD increased by 'only' 802,100 shares, or 80,210 troy ounces...which works out to an increase of 5.43% from the previous report. The short position in GLD now sits at 15,575,200 shares, or about 1.56 million ounces of gold...3.62% of the outstanding shares of GLD. In tonnage, it would require a bit of 774 tonnes of silver to cover the entire SLV short position...more than twelve days of world silver production. In gold, the amount required to cover all short positions is 49.0 tonnes...about seven days of world gold production. One can only imagine what the prices of gold and silver would be if JPMorgan Chase et al had to go into the open market a buy all this metal to cover their short positions. I'm speculating here, but I'd guess that 90% of the short positions in both GLD and SLV are held by these bullion banks. The U.S. Mint had another big sales report. They sold 12,500 ounces of gold eagles...9,500 one-ounce 24K gold buffaloes...and 345,000 silver eagles. The Comex-approved depositories reported that 614,226 ounces of silver were received on Wednesday...and 150,114 troy ounces were shipped out the door. The link to that activity is here. I don't have too many stories for you today, so I hope you have the time to at least skim everything that I've posted below...and can find the time for must watch/reads. Both silver and gold broke above...and then closed above...their respective 200-day moving averages yesterday. Short positions in SLV and GLD rise again. Swiss Gold Refiners Overwhelmed, Major Delays in Deliveries. Sign the White House petition to audit the U.S. gold reserve and track its ownership. Another big sales day at the U.S. Mint. ¤ Critical ReadsSubscribeJim Grant exposes "The Bureau of Money Materialization" and a Submerging AmericaJim Grant spends exactly the correct amount of time (zero) discussing the "urban myth' of the trillion dollar coin in this brief interview on CNBC; instead deciding to try and strike up some intelligent understanding of the dire situation we face. By providing context for our massive 16 trillion dollar debt (360 million pounds of $100 bills), and explaining how exponential the idiocy has become, Grant brings us full circle as he explains to the money-honey that once upon a time our debt was backed by gold, and "there was only so much gold and so many dollars," thus limiting our exuberance, but "now we have neither the gold covering the dollar nor do we have interest rates constraining us [thanks to Bernanke et al.]; the only thing remaining to constrain us is some sort of civil discussion, a numerate discussion about the debt," which it appears the bespectacled and bow-tie-bound bond brain-box hopes is possible. "The debt has increased twice as fast as federal receipts," he warns, adding correctly that "the United States is truly submerging." This must watch 7:09 minute video was embedded in a short cover story over at Zero Hedge...and I thank reader U.D. for sharing it with us. The link is here.  TARP is Over...but the Bailouts Will Continue Until the Big Banks are Broken UpThe infamous Troubled Assets Relief Program that bailed out Wall Street in 2008 – is over. The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors. But in reality it's not over. The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all US bank deposits. That's up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent. The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That's because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible). That's why it's necessary to limit their size and break up the biggest. This short, but absolute must read story was posted on the ukprogressive.co.uk Internet site on Wednesday...and I borrowed it from yesterday's edition of the King Report. The link is here.  Matt Taibbi: Hank Greenberg Should Be Shot into Space For Suing the Government over the AIG BailoutA lot of people are wondering what to think about the news that the board of AIG is considering joining the lawsuit filed by former AIG head Maurice "Hank" Greenberg against the Fed and the U.S. government – a suit that one news outlet describes as charging the state with handing out an "insufficiently generous bailout." The editorial in today's Daily News captures the public feeling over this confusing news story quite well, I think... If chutzpah were a crime, Hank Greenberg, American International Group's former chief, would be going away for a long, long time. Long since driven out of AIG, Greenberg is waging a lawsuit claiming the U.S. hurt the firm's shareholders — including him — when the government rescued the insurance giant with the most humongous bailout of all time. Matt Taibbi goes ballistic over this...and takes quite a few words to rip Hank a new one, with a lot of those words being of the naughty variety. This "R" rated essay was posted over at the Rolling Stone magazine website on Wednesday...and I thank Roy Stephens for bringing it to our attention. The link is here.  Buffett Says Banks Free of Excess Pose No U.S. ThreatWarren Buffett, the billionaire investor who oversees stakes in some of the largest U.S. banks, said the nation's lenders have rebuilt capital to the point where they no longer pose a threat to the economy. "The banks will not get this country in trouble, I guarantee it," Buffett, chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc., said in a phone interview last week. "The capital ratios are huge, the excesses on the asset side have been largely cleared out." Lenders including Bank of America Corp. and Citigroup Inc. have sold assets, cut jobs and bolstered balance sheets after repaying taxpayer bailouts from 2008, when the companies were overwhelmed by losses on securities tied to the housing market. Those actions helped boost financial stocks last year and increased the value of Berkshire's holdings. Warren's father would disown him if he could see how badly his son had sold out to William Jennings Bryan's "Money Trusts". Warren is now a paid whore of the powers that be. It's been sad to watch him fall into the grasp of Mordor over the years. This Bloomberg story was posted on their website late yesterday afternoon...and I thank reader Paul Laviers for finding it for us. The link is here.  Beware the Escape Hatch in the New Mortgage RulesThe Consumer Financial Protection Bureau announced new rules for mortgages at midnight Thursday. The rules, which take effect in January of 2014, require lenders to consider a customer's ability to repay a loan before extending credit. They also provide a safe-harbor for lenders from borrower lawsuits claiming that a loan's terms were unfair. If it strikes you as odd that a lender needs to be told by the government that it should consider the ability of its customers to repay a loan, you are not alone. I know some loans seem so stupid that it's hard to believe that whoever made it thought he'd be repaid. We just went through a financial crisis the proximate cause of which was, after all, lots of people not being able to pay their loans. But nearly all those loans were made under the (perhaps delusional) belief that they would be repaid one way or another. Lenders want to be repaid. Even a lender that sells loans to investors or repackages them as securities needs to provide reassurance that a borrower can repay the loan. If you aren't planning on getting repaid, you aren't really a lender at all. You're a charity. The story was posted on the CNBC Internet site late yesterday afternoon...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.  Bill Clinton named 'Father of the Year'Clinton was named the "Father of the Year" by the National Father's Day Council on Wednesday. The group selected Clinton for his "profound generosity, leadership and tireless dedication to both his public office and many philanthropic organizations," Dan Orwig, chairman of the National Father's Day Committee, said in the announcement. The award will be presented at a luncheon in June. WTF? Words fail me! For a moment I thought it was April Fool's Day...but it's only January 11th...even here in Canada. This blessedly short item from the politico.com Internet site yesterday is the second story in this column that I plucked from yesterday's King Report. The link is here.  Ambrose Evans-Pritchard: We cannot let America's tactical interests dictate Britain's sovereign destinyThe U.S. warnings on British exit from the EU are boilerplate American diplomacy. Washington has been saying these things ever since I started following the matters closely almost 25 years ago. The Americans are correct in a narrow sense. British withdrawal would be a major blow to U.S. strategic interests. Washington relies on the EU to be broadly friendly, a pillar of global free trade, stable, and calm. The White House does not want to be distracted by internecine European disputes as it switches its main focus to the Pacific Rim – the "Asian Pivot" – and deals with the really dangerous issue of China's maritime conflict with Japan and South East Asia. The U.K. is the crucial swing vote in the E.U. system, as I witnessed many times during my Brussels days. Ambrose had been around the block a few times in his career before he began working at The Telegraph...and because of that, this blog of his from yesterday is also an absolute must read. It's Roy Stephens second offering in today's column...and the link is To "The Precious Metal Purchasing Act" From Executive Order 6102 - Santelli's Take Posted: 11 Jan 2013 03:15 AM PST "Ever heard of SB3341?" is Rick Santelli's opening salvo in today's rant-less discussion of the concerns he has with Illinois' 'Precious Metal Purchasing Act'. While passed in the Illinois Senate last year, and moth-balled in the House since, Rick notes that "the long and short of it is, is they want an audit trail to any precious metals, whether you're talking coins or bullion." |
| Even on CNBC, call us anything, just not late for dinner Posted: 11 Jan 2013 03:15 AM PST  Commenting on CNBC yesterday about legislation in bankrupt and murder-plagued Illinois to require registration of every gold transaction, Rick Santelli tossed out GATA's name as an aside, as if the organization is known to everyone who pays attention to the gold market. Unfortunately Santelli did so by remarking that "GATA has a lot of conspiracy theories." We're glad of almost any recognition in the mainstream financial news media -- call us anything, just not late for dinner -- but rather than a "conspiracy theory" organization, GATA collects, analyzes, and publicizes public record of manipulation of the gold market, such as the records compiled in the documentation section of our Internet site. |
| Posted: 11 Jan 2013 03:15 AM PST  he first is with Sprott Inc. President Kevin Bambrough...and it's headlined "Gold to Dwarf 1970s Move by Smashing Through $6,000". The second blog is with Egon von Greyerz. It's entitled "Swiss Gold Refiners Overwhelmed, Major Delays in Deliveries". |
| Asian gold buying to the bulls’ rescue Posted: 11 Jan 2013 03:00 AM PST The mood of bullishness evident since the start of the year continued yesterday, with the FTSE All-World Index equity index reaching its highest level since May 2011. Copper and crude oil rocketed ...  |
| Posted: 11 Jan 2013 01:57 AM PST Perhaps, for a New Year's resolution we should all have on our radar screens the truth in regards to the many conspiracy theories floating around the internet in regards to gold.  |
| UBS Risk Management Fiasco Illustrates Hidden Big Bank IT Time Bombs Posted: 11 Jan 2013 12:36 AM PST Yves here. One of the sources of risk in big and even moderately big banks that does not get the attention it deserves is information systems. Having mission critical systems function smoothly, or at least adequately, is crucial to a major trading operation. Huge volumes of transactions flow through these firms, and the various levels of reporting (customer exposures, funds flows, risk levels, transaction and reconciliation failures) need to be highly reliable or things get ugly fast. Witness MF Global, where the firm was unable to cope with the transaction volume of its final days and literally did not know where money was at various points in time during the day. Now one would think that in the wake of a super duper financial crisis, that big banks would up their game on the risk management/IT front. My guess is the reverse. First, regulators haven't thought much about operational risks; that's only recently been considered something worth thinking about. Second, even though I suspect that over time trading managers have gotten better at managing IT, that likely means they have gone from terrible (as in too preoccupied with the press of business to do an adequate job of specing projects or being willing to try approaches like Extreme Programming) to merely garden variety not very good (as in pretty much no one in corporate-land is willing to spend the extra 20% or so to have developers document their work in sufficient detail that a completely new person could understand what was done). And banks have a monster legacy system problem. Multihundred million dollar programs to tidy up and integrate systems into the One System to Rule (Big Parts of Them) All have this funny way of being cashiered after running up monstrous bills and not getting very far. One window into the severity of this problem: the OCC (yes, our overly bank friendly OCC) graded the 19 biggest banks as failing on a whole slough of operational measures, which included IT. And remember, the list consists mainly of traditional banks (admittedly some really big traditional banks like Wells Fargo), not firms that derive a major portion of their profits from more operationally-demanding trading activities. From American Banker in December (hat tip Richard Smith):
My admittedly dated experience on IT (with two firms that were considered to be extremely good at it) is that the OCC will need to double its estimates on how long it will take. Independent of the fact that it alway take longer than anyone estimates, with major elements of Dodd Frank being hashed out and Basel III both in play and being delayed, a lot of IT projects will be pushed off until those are finalized. But this UBS vignette is one of those peeks behind the curtain to see how bad things often are. Remember that UBS wa sone of the banks recognized to be most at risk in 2008. The Swiss National Bank was caught flat footed when UBS needed a monster bailout and was alone among central banks in making UBS hire an outside party to ascertain exactly what led to the meltdown (an undersupervised CDO team was a major culprit) and publish the findings. The Swiss have also imposed capital requirements of 19% on their banks, a level regarded elsewhere as draconian, and which is forcing UBS and Credit Suisse to downsize considerably. Yet this story published originally in German by Lukas Hässig reveals that even under a tough central bank, a lot of IT messes and deficiencies remain at the big financial firms (although it is also possible that the Swiss set capital levels at 19% precisely because they knew what a mess their charges were). And, quelle surprise, no one responsible has been fired or even demoted. Once you reach a certain level in banking, you only fail upward. By Lukas Hässig, an independent financial journalist in Zurich, who has written two books about the crash of UBS and the end of Swiss banking secrecy. He has operated the internet financial newspaper Inside Paradeplatz with daily news about Swiss banks since 2011. You can contact him at mail_at_lukashaessig.ch. Translation by the author UBS loses hundreds of millions in a failed risk management project After the "A-Risk" project failed, UBS risk control aggregates risks using an excel patchwork. Recently, the investment bank has been inadvertently running open risks stemming from unhedged trading positions with CHF 500m loss potential. UBS's top management has being grilled by the British parliamentary commission for constantly failing to get risks under control, as demonstrated by several catastrophic and reputation-wrecking scandals: the gigantic $40 billion suprime loss, the tax-evasion scheme perpetrated in the USA, the Adoboli fraud and the Libor manipulation. The line of defense of the UBS managers is always based on the same answer: "we did not know". In reality, UBS's top management has always been aware of the deficiencies in risk control. For instance, Walter Stuerzinger and Philip Lofts, the former and the current Chief Risk Officer, were already warned in 2002 by two risk specialists ("The crisis at the heart of UBS", published in "The Sunday Telegraph" on 6 July 2008) of the Zurich head office with extensive experience at main trading centers that the bank was building-up an unacceptably large risk concentration in the US structured credit sector (including subprime) and that the risk management approach was flawed and incapable to capture and hence adequately measure the true loss potential of these exposures. After the subprime losses UBS declared that it had changed its approach and had become particularly risk-averse. However the reality was different: as history shows, UBS did never turn the corner and has remained one of the most aggressive investment banks. The recent failure of the "A Risk" project is further evidence for this statement and it also shows that the integrity and the solidity of the risk control infrastructure is still not a top priority of top management. The "A Risk" initiative was supposed to deliver a state-of-the art and innovative risk monitoring infrastructure and it should have allowed top management to have a global view of all the risks of the bank. After 5 years development and the spending of several hundred million Swiss Francs, "A Risk" does not run as expected and, according to an insider source, is in a "catastrophic status" and has failed to deliver: the various trading desks of the bank still run on different IT infrastructures and the various risks have to be collected from "different databases" and aggregated using Excel spreadsheets with several manual interventions. These are clearly very prone to operational errors. Not very surprisingly, given UBS track record in dealing with risk control failures, the people directly responsible for this failure are still employed by UBS and hold highly paid positions. Among these are teh above mentioned Walter Stuerzinger and Philip Lofts, the former and the current Chief Risk Officer. But also at the next hierarchical level no major consequences seem to have been taken:
While highly paid top shots have succeeded to stay on board, many employees in the back office function are being axed due to the fact that the bank has decided to reduce the investment banking activities. However, good specialists in this area are urgently needed. According to the insider source, in late summer 2011 the Swiss investment banking unit in Opfikon executed a very large transaction in Korean Won. However, the Treasury department that is in charge of managing the balance sheet and hedging the positions forgot to execute the hedge. As a result, the position bearing a 500 million loss potential remained open for several months. As this failure was discovered, UBS started an investigation in which also Finma (Swiss regulator) was involved. However, no consequences at personnel level have been taken. A UBS press spokesman refused to comment this event.         |
| How to Invest Like a Merchant Bank in High-Risk Resources: Rick Winters Posted: 11 Jan 2013 12:00 AM PST It is difficult for retail investors to sift the wheat from the chaff in the junior miner sector. In this interview with The Gold Report, Rick Winters reveals how RMB Resources, a resource merchant... Visit the aureport.com for more information and for a free newsletter      |
| Fear Index December 2012: No Free Lunch Posted: 10 Jan 2013 10:45 PM PST The US fiscal cliff debate is over, and if you'll excuse me for resorting to a well-worn gold bug cliché, the can has just been given another kick down the road. The problem is of course that the can is getting ever bigger and heavier.  |
| Gold recovers to $1,675 an ounce as Chinese inflation hits 2.5% Posted: 10 Jan 2013 07:59 PM PST Inflation stood at 2.5 per cent in China in December, according to new official figures that likely understate the true rate and lie above the stated maximum target of two per cent. Gold prices advanced to $1,675 on the news before falling back a little. Gold is usually seen as the natural hedge against inflation. Silver edged close to $31. Higher Chinese inflation chimed well with the restated link with higher gold and silver prices expounded by Euro Pacific Capital boss Peter Schiff recently. He produced data series showing that official US inflation figures are not correctly reporting inflation, unlike in the 1970s when they did a good job… 'Between 1970 and 1980 the officially reported CPI rose a whopping 112 per cent, and prices of our basket of goods and services rose by 117 per cent, just five per cent faster. In contrast between 2002 and 2012 the CPI rose just 27.5 per cent, but our basket increased by 44.3 per cent, a rate that was 61 per cent faster.' Misleading data Mr.Schiff concludes that the Fed is misleading itself with this inflation data and therefore taking the wrong policy options as it did with subprime mortgages until it was too late to prevent the blow up of 2008. Anybody paying food or medical bills over the past five years will know what he is saying is correct. He notes: 'Unlike Krugman and the Keynesians, I would argue that it is impossible to create something from nothing. I believe that printing a dollar diminishes the value of all existing dollars by an aggregate amount equal to the purchasing power of the new dollar.' The investment implications are easier to understand: buy gold and silver to protect agains the printing of money. The Fed can churn out dollars and cause inflation, and the Chinese authorities and other global central bank by the way have been doing the exact same thing with their stimulus packages, and precious metal prices will rise. However, the more difficult thing for analysts to predict is when the official rate of inflation will accelerate and the price of precious metals with it. That is now happening in China. Gold bugs The Chinese government has already stated its policy of doubling gold consumption to 1,000 tons per annum over the next three years (click here). Imagine what will happen if all those millions of individual savers decide to become gold and silver bugs to protect their savings. May you live in interesting times as the old Chinese saying goes, especially if you invest in precious metals! |
| The Federal Government Hands Out Money To 128 Million Americans Every Month Posted: 10 Jan 2013 07:16 PM PST
According to Tyrrell and Beach, federal spending on entitlement programs has been rising more than 6 times as fast as population growth has in recent years...
But even though the numbers that Tyrrell and Beach present in their paper are incredibly shocking, the truth is that they have probably underestimated the true scope of government dependence in America today. Just consider the following numbers... Food Stamps Back in the year 2000, there were about 17 million Americans on food stamps. That number has exploded to more than 47 million today. Medicaid If you can believe it, today more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls. Social Security Right now, there are more than 53 million Americans on Social Security, and that number is projected to absolutely explode as huge waves of Baby Boomers retire in the coming years. Medicare As I wrote about in a previous article, the number of Americans on Medicare is expected to grow from 50.7 million in 2012 to 73.2 million in 2025. And those are only four examples of government programs that have seen their numbers explode in recent years. There are so many more that could be mentioned. Overall, the federal government runs nearly 80 different "means-tested welfare programs", and almost all of them are experiencing explosive growth. So is the "128 million" figure that Tyrrell and Beach have come up with actually too low? I believe that it is. But in any event, nobody can deny that the "welfare state" in the U.S. has absolutely mushroomed in size since the turn of the century. According to one recent poll, 55 percent of all Americans say that they have received money from a safety net program run by the federal government at some point in their lives. We are a nation that has become very comfortable leaning on Uncle Sam for help. And poor people from all around the globe see how good things are here and they are eager to get a seat at the table. In a previous article, I talked about a federal government website ("WelcomeToUSA.gov") that actually teaches new immigrants how to apply for welfare once they are able to get into the United States. Will we all eventually becoming dependent on the government? If that happens will we still be free men and women? Once someone is dependent on the government, they become forced to do what the government tells them to do in order to survive. If we all eventually become dependent on the federal government, how much power will that give them over us? That is something to think about. Another thing to ponder is how the U.S. middle class is rapidly disappearing. There will always be poor people, and we should always take care of them, but what we should be truly alarmed about is how the middle class in America has been dramatically shrinking in recent years. One of the biggest reasons why so many Americans are applying for government assistance these days is because there simply aren't enough jobs for everyone. Politicians from both political parties have fully embraced the one world "free trade" economic agenda of the global elite, and as a result millions of our jobs are being shipped out of the country. Big corporations can either choose to pay U.S. workers a living wage with benefits, or they can choose to set up shop on the other side of the globe where it is legal to pay workers slave labor wages with no benefits. Plus there are much fewer taxes and regulations to deal with typically on the other side of the globe. As long as this nation pursues this "one world economic agenda", there will never be enough jobs in the United States ever again. Chronic unemployment will become the new normal. Our formerly great manufacturing cities will continue to degenerate into gang-infested war zones. Apologists for the current system continue to insist that the answer is "more education", but the truth is that government dependence is even exploding among those with advanced degrees. The following is a brief excerpt from a recent article on The Chronicle Of Higher Education...
After reading that, does anyone still believe that "more education" is the answer to our problems? What we need is more jobs, and lots of them. Unfortunately, our politicians continue to pursue policies that absolutely kill American jobs. So the number of Americans that are forced to turn to the government for assistance will continue to grow, as will our national debt. Sadly, most Americans still don't realize what is happening. Most of them are still listening to those in the mainstream media that are insisting that everything is going to be just fine. For example, the most famous economic journalist in the country, Paul Krugman of the New York Times, recently wrote that the deficit crisis has been "solved"...
Oh really? I don't know how in the world Paul Krugman can get paid to write such nonsense, but the truth is that our government debt problems are only just beginning. In a previous article, I explained that the unfunded liabilities of the federal government are growing so rapidly that we could not cover them even if we raised the highest tax rate to 100%...
Yes, Paul Krugman, we do have a spending problem. Even if Bill Gates gave every single penny of his fortune to the federal government, it would only cover the U.S. budget deficit for about 15 days. We simply cannot go on spending money like this. If anyone out there believes Paul Krugman and is convinced that the federal government is no longer facing a massive debt problem, please read this article: "55 Facts About The Debt And U.S. Government Finances That Every American Voter Should Know". But if we can't afford to do all of this spending, then why are we doing it? Well, it is because there are a whole lot of people out there that are really hurting. Poverty in the U.S. is absolutely exploding, and the gap between the wealthy and the poor has grown to unprecedented heights. According to a recent article posted on Economy In Crisis, the bottom 60 percent of all Americans only own 2.3 percent of all the financial wealth in the nation combined. That is astounding. If you live in a wealthy area of the country, you may look around and things may look really good to you. But in many other areas of the country things are worse than they have ever been in the post-World War II era. For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year. Can you imagine that? We have over a million kids that are attending our public schools that do not have a home to go back to at night. Our economy desperately needs more jobs, but we just continue to lose more of them. On Thursday, it was announced that American Express is eliminating 5,400 more jobs. More announcements like this come out just about every day now. 65 percent of all Americans expect 2013 to be a year of "economic difficulty", and there aren't a whole lot of reasons to be optimistic about things at this point. When you lose your job, it can feel like your entire life is falling apart. The competition for jobs is absolutely fierce, and a lot of workers have fallen through the cracks. In this rough economic environment, there are millions of Americans that have never been able to put the pieces of their lives back together. A recent CNN article profiled a 42-year-old woman up in Oregon named Lynette who has had her life totally turned upside down by unemployment...
She used to work in a position that helped others find government assistance, but now she is the one who has been forced to seek it...
Does anyone out there have a similar story to share? If so, please feel free to share it below... |
| Price of Gold “Surprisingly Low” as Chinese Trade Surplus Jumps Ahead of New Year Posted: 10 Jan 2013 07:15 PM PST
WHOLESALE London gold rose back to Wednesday's 4-session high this morning, trading above $1664 per ounce. Currencies were little moved, with "no change" decisions on interest rates expected in both the UK and Eurozone. World stock markets ticked higher – and commodities averaged a 1% gain – after strong new data from China. Major-government bonds eased back meantime, and weaker Eurozone bond prices rose, after Spain successfully raised a fresh €5.8 billion ($7.6bn) of new debt at lower rates of interest than the last time of asking. "Quantitative Easing is not the only bullish factor for gold," says January's Metal Matters Monthly from bullion-bank Scotia Mocatta. "The financial system is drowning in debt and there seems no end in sight to ongoing massive budget deficits…Confidence in the financial system and in the fiat government paper that facilitates [it] will remain low." "The physical market has already responded positively to that price fall, with bargain hunting appearing in a number of regions," says a note from another London market maker. "Our view," added Nic Brown of French bullion bank Natixis to Reuters on Wednesday, "is that gold prices are likely to trade lower as the year progresses, but there are some significant upside risks in the very near term." "If there was a reason for buying gold, you've got two good ones" in next month's Chinese New Year and the 'debt ceiling' deadline in the US political system, now just 7 weeks away, he added. "We're surprised at how low gold prices are." Currently 0.8% lower from New Year's Eve versus the US Dollar, the gold price is currently flat for the month-to-date against the Euro, and more than 0.8% higher against the Japanese Yen at ¥146,600 per ounce. "Whereas gold is above its 1980 highs against both the USD and the [Swiss Franc]," says a technical note from London market-maker HSBC's foreign exchange team today, "it has yet to surpass that barrier versus the [Japanese Yen]." Rumors earlier this week claimed that the Bank of Japan is "mulling" a rise in its consumer-price inflation target from 1% to 2% – something which the Fitch Ratings agency said it would "watch closely" as Tokyo's public debt continues to swell. "It appears probable," says HSBC, "that the 1980 high of ¥204,850 [per ounce] will be beaten before the gold bull market runs out of steam." On the data front Thursday, China reported a surge in December trade, with its total surplus rising to $31.6 billion as imports rose 6% but exports leapt 14% from the same month in 2011. "The rise in exports was a result of a rebound in demand from the major market – the US," says ANZ bank's chief China economist, Liu Li-Gang. "Overall, the data today have lifted hopes for the Chinese economy, and financial markets," says Steve Barrow at Standard Bank, noting last month's 43% jump in 'total social financing' – a new measure of private-sector credit growth which includes non-bank lending. Warning that China's economic growth could slip to 6% in 2013 however, such a Chinese "hard landing" would have serious implications for the gold price, says a report from Societe Generale. The Bank of England meantime left its key interest rate at 0.5% for the 46th month running, and kept its money-creation "asset purchase" scheme at £375 billion ($600bn). Speaking later on Thursday, the European Central Bank was also expected to leave its monetary policy unchanged, two days after the European Union warned of a worsening mismatch between skills and jobs, most "notably in Southern Europe". There "the risk of poverty or exclusion is [also] constantly growing," said a separate EU report. Greek and Spanish unemployment now both stand above 26% according to Tuesday's Eurostat release. Adrian Ash Gold price chart, no delay | Buy gold online 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 and silver in Zurich, Switzerland for just 0.5% commission. (c) BullionVault 2013 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.  |
| Commodity Technical Analysis: Gold Testing Near Term Trendline Resistance Posted: 10 Jan 2013 06:42 PM PST Gold huge support last week defined by the 61.8% retracement of the rally from the 2011 low (lowest level of the move from the record high) and former resistance (top of congestion from June to August 2012). |
| Posted: 10 Jan 2013 03:15 PM PST |
| Riverstone Resources Corporate Update Posted: 10 Jan 2013 03:14 PM PST Update 1: GGR comment added at bottom. VANCOUVER, BRITISH COLUMBIA - Riverstone Resources Inc. (TSXV: RVS) (the "Company") announces that further to its news release of December 19, 2012, the Company has reduced the aggregate number of incentive stock options granted to employees, officers, consultants and directors of the Company by 493,000 options. The remaining options are exercisable for common shares in the capital of the Company until December 19, 2017, at an exercise price of $0.62 per share. All incentive stock options were granted in accordance with the Company's stock option plan. ON BEHALF OF THE BOARD "Dwayne Melrose" Dwayne Melrose, President and CEO For further information contact: Investor inquiries: Don Mosher Tel: 604-685-6465 Media inquiries: Ian Noble Tel: 604-809-8750 Additional information about the Company and its activities may be found on its website at www.riverstoneresources.com and under its profile at www.sedar.com. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. GGR Comment: We do not know the reason for the reduction in the number of options granted, but we do know that we found the amount of options management granted themselves to be offensive. In a recent Vulture Bargain Update to our Subscribers, we said in part: "...on December 19 the company (Riverstone) announced they had granted themselves a whopping 4,250,000 stock options at $0.62 per share at one time. FOUR MILLION TWO HUNDRED FIFTY THOUSAND options. // That is precisely the kind of corporate action that can sour our goodwill. Having profitably exited a little over half our stake, we are conflicted now. ... Riverstone has already paid its way into what we could call Trophy Shares, (our having taken profit on it several times) but we will be looking to reduce our size to just one unit from two as we move forward." - GGR January 6, 2012. The reduction today could be a sign that the company has heard shareholder pushback, but there could be an entirely different reason for the reduction. Disclosure: Riverstone Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #3. Members of the GGR team may hold positions in RVS.V or RVREF. |
| Draghi Comments; Markets Party Posted: 10 Jan 2013 02:13 PM PST ECB President Mario Draghi announced that the ECB, in an unanimous decision, voted to leave interest rates unchanged. Many market observers were expecting a rate cute. The announcement was viewed as an expression of ECB confidence in the EuroZone economy and thus had a devastating effect on the US Dollar with traders rushing to ply the risk trades particularly in the commodity sector, which if you recall the chart I published yesterday, had recently been on the receiving side of a good butt whipping by the hedgies. It is astonishing how rapidly sentiment, and thus money flows, can change in these modern markets. It is like watching an entire business cycle occur within a 24 hour period! Take one look at the following two charts and then you will understand why nearly anything remotely resembling a commodity is higher. Here is the first chart - the Continuous Commodity Index or CCI: Note that the price has run exactly to the 200 day moving average. The big test now comes tomorrow or early next week to see if today's Draghi-induced rally has any legs. If it does, and the index can trade back above that level, expect to see further strength in gold and in silver as fund flows will be coming back into the overall commodity sector. By the way, all of the base metals, with palladium and platinum, were especially strong today. That bodes well for silver if it keeps up.  The next chart is the US Dollar Index. It was hammered lower today and I do mean "hammered". I find it especially interesting to see that it too failed at the 200 day moving average. Were it not for sharp losses in the Japanese Yen, the Dollar collapse would have been even more severe.  Taken together, these two charts pretty much tell us all that we need to know about today's price action in the precious metals. With the Dollar dropping sharply, the risk trades were on in full bore and that means big money flows into both equities and into commodities. That in turn pushed up silver and gold. I do find it noteworthy that the long bond, while it was weaker today, was down less than a full point. A move of the magnitude that we witnessed in the Dollar and the surge in the S&P 500 should have been good for more than 20 ticks or so. That is a flag that stands out to me. With all the hoopla regarding the onset of the risk trades, the bonds should have been knocked on their can with money flowing out of that sector in chase of higher yields elsewhere. I was looking for at least a full point or lower move in that market; we didn't get it. Hmmm.... let's see what we get in that market tomorrow. If it fails to move lower, I have to wonder if we are going to see a continuation of today's commodity and stock buying binge. In the aftermarket in the S&P, it looks as if the bull train is leaving the equity station and there is a panic to get on board but the bonds are still not imploding lower - yet.... The HUI did put in a good day bouncing further from that 420 support floor. It still is not out of the woods as the bears remain in control of the larger trend until we get a close through the 450 level. One thing is certain however, value based buying has continued to manifest itself every single time this index moves to that 420 level. Apparently investors see value in the mining shares that comprise this index on moves toward recent lows. That is a good sign for the beleagured bulls. The longer this index remains above 420, the better the chance that it will spark a wave of short covering which is what is needed to kick off any sort of uptrending move.  Take a look at the gold chart and note that it accomplished STEP ONE - it made it through the 200 day moving average and did not fall back through it. That is a good first step. The big key however is last week's high just shy of the $1700 level. If the bulls can muster enough conviction to take it through that level it will have enough upside momentum to take it through $1700. What it does next then will show us whether we have the beginning of a good uptrend move or just another bounce higher against which bears will be able to successful sell. If you look at the graph of the RSI, Relative Strength Index ( an old but solid technical indicator) you can see that it has not been able to get back above the 60 level since early October of this past year. That is a classic case of a market in a bearish posture. What we want to see is this indicator take out the 60 level and get to at least 70 before we can call this latest move the real thing. It should closely coincide with an upside breach of $1696 - $1699. Let's see.  I have to make one more comment before closing - while one cannot fight the trend as a trader if they wish to be successful, for the life of me, I cannot fathom how the S&P 500 can continue heading in a vertical upward direction putting it within 120 points or so of its all time high. One would think that they is hardly a care in the world about the economy or the horrific condition of the US Federal government. Proof positive that what the Fed wants they are generally going to get! |
| Posted: 10 Jan 2013 01:30 PM PST Read the Wednesday Afternoon Wrap-Up for 1/9/2013 and the Thursday Morning Commentary for 1/10/2013 As many of you are well aware, I DESPISE "hedge funds" – as much as any Wall Street scam. And I should know; as I worked as a hedge fund analyst/trader in 1996-98; a vile experience I have described in multiple RANTS. "Hedge funds" are supposed to be "market-neutral"; that is, as long as they are short. However, I'd guess 90% are long-only, or nearly so; constantly falling prey to "OPTIMISM BIAS", "career risk fear"; and, of course, fraud. Typically, such "2+20" funds take 2% of your funds in annual management fees, and 20% of all profits; while NOT sharing in the losses and only allowing withdrawals once or twice per year – often, with significant penalty fees. In other words, a GIANT SCAM; particularly as 88% underperformed the S&P 500 in 2012 – when essentially ALL asset prices increased… 88% Of Hedge Funds, 65% Of Mutual Funds Underperform Market In 2012 Given the S&P 500 was up 16.0% in 2012 (including dividends), the average hedge fund return of 1.2% was not only horrible, but nearly CRIMINAL… Bloomberg Global Aggregate Hedge Fund Index And just to rub it in Wall Street's LYING, CHEATING, INEPT faces, here's a comparison of the Bloomberg Global Aggregate Hedge Fund Index with other assets classes over the past five years… As you can see, not only did hedge fund managers get BLOWN AWAY by PHYSICAL silver and gold; but even the staid Dow and horrifically suppressed HUI as well. And better yet, even the "ALGO FUNDS" – which use nothing but computer programs to "beat the market"; have lost money two years running! London Quantitative Hedge Funds Report Second Year of Losses In other words, you'd have to be INSANE to put money with so-called "brilliant" hedge-fund managers… Paying 2 And 20 For What Again? Hedge Funds Underperform Stocks For Third Year Running Heck, I've known hundreds of such "geniuses" over my 20+ year Wall Street career; and TRUST ME, 90% are common "stock jockeys"; piling into whatever "hot stock" is making headlines – typically, right at the top… A Record 216 Hedge Funds Own Apple: The World's Biggest Hedge Fund Hotel Gets Even Bigger And by the way, to "Trader X"; you know, the guy that claims "mega-Hedge Funds" are the culprits behind PAPER PM shorting – give me a break. These MOMENTUM MORONS can't even beat the market with Apple; so why on Earth would they be shorting assets that have risen for 12 straight years? Let alone, at odd hours like 8:00 PM EST; or in WATERFALL fashion, ensuring the worst possible execution? True, some such funds – the most dangerous of all, executing extremely short-term trades – are what Ted Butler calls "raptors"; that is, trading off the same, blatantly obvious Cartel "signals" I highlight each day. However, if that were the case, they'd eventually need to COVER their shorts, causing an occasional sharp increase; which NEVER seems to happen. In the big picture, "hedge funds" are nothing more than a Wall Street SCAM – in most cases, perpetrated by "Tier 3" and "Tier 4" idiots – to STEAL from unsuspecting investors. Most are too dumb to invest themselves out of a paper bag; let alone create complex frauds like COMEX gold and silver naked shorting. Thus, the further from these leaches you stand, the better off you'll be! PROTECT YOURSELF, and do it NOW! Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.Similar Posts:
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