The Most Significant Developments of 2011 with Trends in 2012

As always the four great variables in human history are weather, disease, war, and religion.  The first two are of God and the latter of men.

Weather spans a wide range of natural phenomenon including earthquakes, and similarly religion includes secular movements and philosophies such as fascism and communism,  essentially godless religions that involve the ordering of the relationship of the

Warren Pollock Interviews James Kotoulas on MF Global and JP Morgan's Role In Its Bankruptcy

Gold Daily and Silver Weekly Charts - Gold Finishes Eleventh Straight Year Higher

The metals bounced today, but were pushed down into the close on extremely light trading.

I am going to be busy preparing for New Year's Eve but I may post some thoughts on Sunday evening about the year ahead.

Have a Happy New Year everyone.

SP 500 and NDX Futures Daily Charts - SP Cash Finished Year Dead Even

Boring day overall, but the big excitement was that Wall Street was able to bring the cash SP 500 in at dead even for the year.

Have a Happy Holiday everyone. Keep in mind that the US markets are closed on Monday.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Lawrence Lessig: Republic, Lost - The Quiet Coup D'etat

"Money Buys Results In Congress"

Summary: The reason for the failure of the American economy and the inability of the government to address it is because of the corruption and distortions inherent in a system where campaign contributions control the politicians and the policy, and less than one percent of the people control the vast majority of those campaign contributions and therefore the

Chris Powell: Financial Repression

10:35p ET Thursday, December 29, 2011

Referring to Financial Times editor Gillian Tett's December 22 column, "Ties Between Sovereigns and Banks Set to Deepen," to which the GATA Dispatch called your attention the other night with the headline "Citing 'Financial Repression,' FT's Gillian Tett Sounds Like Jim Rickards and Rob Kirby" http://www.gata.org/node/10828, a friend asks:

"Is the message

Gold Daily and Silver Weekly Charts - Painting the Tape Red

There was intraday commentary here.

The thought is that the big metals shorts are hammering the paper prices in thin trading to 'paint the tape' for their year end mark-to-market. 

It smelled like a capitulation today, but as the volumes were so thin I would not care to call it.   But 1524 had the look of a bottom.  Aggressive traders must be chomping at the bit. 

Let's see how the year

SP 500 and NDX Futues Daily Charts - Quiet Days Are Good for Painting

Very light volume day, and the tape was duly painted into the year end.

The commmentary on the financial news networks is so disassociated from reality it is almost like something out of Sunset Boulevard.

I'm ready for my closeup Mr. DeMille.

Five Charts Useful for Framing the Economic Debate in 2012

These charts are from a collection of favorite charts put together by Jared Bernstein from material put out by the Center on Budget and Policy Priorities.

The End of Year Precious Metal Bullion Bear Raid - Another Form of Window Dressing?

Like many others who watch the markets I have wondered what might be prompting this obvious bear raid on the paper precious metals market over past four weeks.

It could be explained by any number of economic developments including the decline of the Euro, but that does not really explain the downward market action which has been sporadic and not associated with news, moreso than fundamental.

Gold Daily and Silver Weekly Charts - Dr. Bernanke's Imaginarium

They bombed the thin markets early on, running the stop loss orders and forcing liquidation not only in the futures but in the related markets like the miners and the ETFs.

The first chart shows this fairly well.

This permits a liquidation of certain assets to occur, profits on related plays and short positions and of course the obtaining of key assets on the cheap for the next ride up.

I

SP 500 and NDX Futures Daily Charts - Light Volumes

Watch for window dressing at the end of week unless Europe blows up.

These are just the preliminary portfolio adjustments no matter how much 'analysis' they may wish to wrap around this dead fish.

History Lesson

History Lesson by Arthur C. Clarke has been one of my favorite short stories since boyhood. It contains an allegorical lesson about the importance of context and assumptions in scientific and historical study. It has served me well throughout the years.

The story is of course an intellectual descendant of Plato's Allegory of the Cave, from Book VII of The Republic, which I also enjoyed as a

Gold Daily and Silver Weekly Charts - Comex, What Is It Good For?

The Comex. What is it good for?

Originally it provided a useful platform for buyers and producers to hedge their risks and set markets based on supply and demand.

Now it seems to have degenerated into a platform for fraudulent price manipulation and the confiscation of productive capital by those who neither buy nor produce, but merely game the system and break the rules, simply because they

SP 500 and NDX Futures Daily Charts - Much Ado About Nothing

Very light volumes.

Lack of interest? Apparently so.

And it looked like most of that thin volume was just the wiseguys tossing the hot potatoes around.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Franklin Roosevelt's 1936 Address

Campaign Address at Madison Square Garden, New York City.
"We Have Only Just Begun to Fight."
October 31, 1936


Senator Wagner, Governor Lehman, ladies and gentlemen:

ON THE eve of a national election, it is well for us to stop for a moment and analyze calmly and without prejudice the effect on our Nation of a victory by either of the major political parties.

The problem of the electorate

Gold Daily and Silver Weekly Charts

Today was hardly worth the time and energy expended to watch them fluff the markets to suit their year end bonuses.

Have a Merry Christmas everyone.

SP 500 and NDX Futures Daily Charts

As boring days go this one was right up there.

Gold Daily and Silver Weekly Charts

The long only funds were promoting their end of year stock results today on very light volumes. Miners and metals are such a slight holding amongst them that they are easily ignored in favor of a paper-only policy.

The market sat on the price of gold and silver all day throughout the paper rally to keep a lid on them. It could be getting easier in the short term as individual investors shun

SP 500 and NDX Futures Daily Charts

Like watching paint dry on a virtual house in Farmville.

The only real excitement was an announcement that SP had cut Goldman's debt rating from their web site that took the stock down. That was a disavowed a few hours later and the stock rebounded.

The NDX is lagging from the SP which has been leading the rally higher. This sort of 'broad rally' is often driven by the buying of the SP

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Ann Barnhardt Discusses MF Global with Peter Schiff - "There Is No Rule of Law Anymore"

There are some interesting facts brought out in this discussion. I do not necessarily agree with everything she says, and she is obviously outraged.

I do not believe in capital punishment except for the most extreme crimes against humanity, and I also think that boycotts and reforms must be targeted to be effective.

Peter Schiff is promoting his agenda, and this leads to a rather comical

Gold Daily and Silver Weekly Charts - 2012: The Year of Living Dangerously

There is nothing 'modern' at all in Modern Monetary Theory. It is the same old fish wrapped in slightly different paper. The godfathers of Modern Monetary Theory are John Law, G.F. Knapp, J.M. Keynes, and most lately Alan Greenspan.  But its roots go back to any ruling group that ever debased a currency or seized private property by fraud.

It is in the nature of a Ponzi scheme. As long as its

SP 500 and NDX Futures Daily Charts - Light Volume, Phony Action

Richard Russell says what is on my mind quite well.

The outlier is the Fed, and a willingness to print to nominal results without regard to the value at risk of the currency.

“I talked with my good friend, Joe Granville, over the weekend, and Joe is as bearish as I’ve ever seen or heard him, based on his OBV volume figures. This checks with my own work and studies.

While fundamentalists

JP Morgan's 'Suspicious Involvement' in the Collapse of MF Global

James Koutoulas on JP Morgan's involvement in the MF Global collapse:
"[JP Morgan] wears way too many hats in this situation. Their fingers are all over this. They were a custodian of customer segregated funds, they were a primary lender to MF Global,...they were head of the creditors' committee in bankruptcy court, they're buying customer claims for pennies on the dollar—vulture claims, and it

Guess Where a Big Chunk of MF Global Customer Money Just Turned Up? At JPM London

Let's see.  MF transferred $200 million to their clearing bank JP Morgan in London three days before their bankruptcy according to the WSJ.  Dealbook says it was on the LAST business day.   And it took the regulators THIS long to find it?

And allegedly at the time JPM London suspected that the money might be coming from the customer accounts.  I wonder why that would occur to them?  

Read

Income Inequality in Post-War America

Regarding Occupy Wall Street and voices protesting the widespread fraud and inequity in the US financial system, Home Depot co-founder Bernard Marcus said, "Who gives a crap about some imbeciles? Are you kidding me?”

JPMorgan Chase & Co. CEO Jamie Dimon, whose 2010 income was $23 million, talked about hostility toward bankers. “Sometimes there’s a bad apple, yet we denigrate the whole.”

Gold Daily and Silver Weekly Charts - Big Relief Rally, But No Breakout Yet

Today was what we call a 'technical trade.' The insiders saw an opportunity to make some quick cash by running the market up.

There was no real news underlying the rally, just greed meets opportunity in a light volume market.

As I cautioned yesterday, it is sometimes perilous to short a dull market.

Oracle warned after the bell.

Europe remains a significant risk. The US economy is

SP 500 and NDX Futures Daily Charts - Santa Claus Came on Light Volumes

Utterly fraudulent rally on light volume.

The wiseguys saw an opportunity to run stocks higher in a dull market as I had cautioned they might yesterday.

This may or may not stick depending on whether the news intrudes into their ponzi Christmas scheme.

But it was a rally based on pure fumes and greed, and nothing more.

I used it to square up and sold into it, and am now holding a paired

Net Asset Value of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts - Raid on Silver, Gold's Turn at Resilience

This is a thinly traded market in Europe and the States. And it will get thinner as the week goes on.

The paper metals market is diverging from the physical bullion market.

SP 500 and NDX Futures Daily Charts

The futures have now rolled to the front month of March.

Thin volumes today and they will get thinner as the week progresses.

Keep one eye on Europe. And be careful in 'shorting a dull market.'

They may jam one for Santa.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt.  In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.

Although the details and the individual perpetrators are yet to be disclosed, what is now painfully clear is that the CFTC

Gold Daily and Silver Weekly Charts - A Bounce in Bullion and Miners on Quad Witching

Gold and Silver bounced today, and that is all that we can call it so far.

Key resistance for gold is 1620. The gold chart has been changed to reflect a repeating formation from earlier this year, on a much larger scale.

A special thanks goes out to my friends at ThirdEyeOpenTrades for reminding me about redrawing the distribution cycle to match that of the beginning of the year.   Bob helped

SP 500 and NDX Futures Daily Chart - Zynga Pops 'n Flops on the Quad Witch

Today was a quad witching day and the SP and Russell are also re-balancing after the bell. So much of the volume today is back end loaded.

Zynga popped at 11 and flopped below its IPO price of 10. Not exactly bullish for US equities.

See you Sunday evening.

Gold Daily Chart - Gold Rally and Decline Tracks Chart Formation From First Half of Year

This formation, if activated and valid, would target gold to a much higher level than the previous high.

Let's see how this develops. I will be tracking both this and my normal scenario obviously. Both are bullish but this alternative view promises a wilder ride.

The similarity between the big accumulation-liquidation cycle and the previous cycle from March to July is remarkable in many

Gold Daily and Silver Weekly Charts - A Market of Pros and Schmoes, With Investors Sidelined

Hermes: 'Alas?' This word of regret the mighty Zeus does not understand.

Prometheus: Time in its aging course teaches all.


Aeschylus, Prometheus Bound
I liked the silver action a bit today, and added back some protective stock index hedges to cover a dalliance into the beaten down silver and gold miners, while adding to the existing bullion positions as well.

This market is as phony as a

SP 500 and NDX Futures Daily Charts

UK Public 'the Worst Off' of the developed G7 Countries With 4.5% Negative Interest Rates

Perhaps this is why the western Central Banks are so determined to prevent the price of gold from breaking out, and keep putting out disinformation from within a cloak of secrecy about their inflationary policies and money creation.

Negative real interest rates are very bullish for gold, and highly corrosive to the ordinary savings of those who lack the sophisticated financial instruments to

NY Fed Granted MF Global Primary Dealer Status Despite Concerns and Lack of Due Diligence

So how persistent was Jon Corleone in that private meeting?

Confidence begins with honesty, a sense of fairness, and respect for justice. Not just the letter of the law, but the spirit of the law as well.

"If we desire respect for the law, we must first make the law respectable...Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds

CFTC's Sommers: "We Know Where the Customer Money Went"

Ok, Jill, spill.  Don't bogart the 411 and go all Federal Reserve on us.

Where did it go, and when do the customers get it back?

Or do we have to wait until the dirty laundry comes out of the spin cycle?

And how come Bart Chilton says you DON'T know where all the money went?

Oh and if you find that missing money, can you also check and see where the investigation into manipulation in the

Gold Daily and Silver Weekly Charts

The US Dollar continued to benefit today from weakness in the euro.

Gold was hit hard, and silver confirmed the breakdown in a determined bear raid.

Intraday commentary on the metals here.

The long bullion - short stocks paired trade continued to work today. I added some metal positions during the battering. And I took off the short hedges, but I may put them back on depending on how things

SP 500 and NDX Futures Daily Charts

VIX remains elevated, but relatively low in the current range for the kind of rhetoric the financial press was putting out today.

Let's see if the SP will break down further.

Credit Agricole was lowered by Fitch after the bell but the outlook remains 'stable.'

Perhaps Europe will collapse and the SP will roll over. But I am highly suspicious of this low volume trade. Still it is better

The LIBOR-Gold Forwards Pain Index - Gold Lease Rates Plunged - More Than Meets the Eye

This is the reason for the ferocity of this sell off in my judgement, coupled of course with a general liquidation in stocks and other 'risk assets.'  I cannot help but notice that despite the message of panic, the SP futures remain in a fairly well defined trading range that goes back to late October.  The lower bound of its triangle is around 1180.

Maybe things will fall out of bed, and

Net Asset Value of Certain Precious Metal Trusts and Funds

I wonder how the availability of physical bullion is at these prices today.

Gold Daily and Silver Weekly Charts - Gold Breaks But No Silver Confirm - Did Jonny Lie?

Stocks were rallying until the afternoon and the FOMC announcement which withheld the QE Christmas candy.

Stocks went down hard led by the banks. Gold was hit very hard by a bear raid sell off down to 1620, while silver maintained some strength.

The stock market rebounded into the close somewhat as did gold. Silver has not confirmed the breakdown by gold out of its symmetrical triangle.

Why

SP 500 and NDX Futures Daily Charts - Big Intraday Reversal As Benny Whimpers into Year End

There was a big intra-day reversal in stocks as Benny failed to provide any QE Christmas Candy in the FOMC stocking today.

The index fell out of its triangle. The bulls have their work before them to save the day and get the Zynga IPO out the door.

MF Global Cash at JP Morgan 'Presumed Its Own' So It Can Pay the Bankruptcy Trustees

So what is MF Global going to do with that $25 million in cash held in their account at JPM?

Presumably it will be used to pay the Bankruptcy Trustees and lawyers who decided that it belongs to MF Global and not the cheated customers whose accounts have been looted.

JPM apparently cut a deal with the Trustee saying they could have the cash if MFG granted JPM a lien on ALL the company's assets

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

The MF Global Management: I Know Nothing, NOTHING!

Why WERE all these jokers being paid so much?
What did they actually do to earn it? 

They weren't involved with the trades, and they weren't involved with the management of billions of cash, and the customer accounts,  their most sacred trust.

Have a Futures Account on the CME? Sleep well.
Your money is in the hands of those who know

Money Supply Update - Strong Money Growth But Slack Velocity

Although organic growth in the real economy is slack, the Fed has managed to maintain about 10 percent growth rate in M2, and around 8.5 percent in MZM.

As you might expect with money growth this high and real economic activity hovering at recession levels, the velocity of money is at record lows.

This is not yet stagflation, but it is the setup for such a condition to develop. The question

Gold Daily and Silver Weekly Charts - Bear Raids and Perception Management

The lease rates indicate that someone dumped physical gold in a non-profit seeking manner into the gold-paper markets last week. I wonder who that could be. I suspect it helped fuel the bear raid on gold today.

Bloomberg TV was having an all day anti-gold festival, so I will surmise that something gold-friendly is coming up in the next few weeks.

Perverse logic perhaps. But it is what it is

SP 500 and NDX Futures Daily Charts - Real and Unreal, Intel and Zynga

The US markets were moving lower after a warning by Intel on their forecast. As you may recall I had said last week that my tech sector information was that sales were going to be weak. This has nothing to do with a lack of hard drives, which was the excuse presented.

The stock markets are still within their triangles and I would expect them to stay there unless something really happens to

Gold and Silver Lease Rates

Tom McClellan put forward a hypothesis today on Bloomberg TV that the spread between gold lease rates and LIBOR has been extraordinarily wide, and therefore it has been difficult to short gold. This sustained gold at an unusually high price. But now it is correcting so gold will fall much more in price as the shorts pile in.

I cannot speak to LIBOR, but the gold lease rates have hardly been

Gold's 150 Day Moving Average

This is a delivery month for gold and silver.

The Fed will be giving its last rate decision for the year tomorrow.

This is one of the more active weeks for stock IPOs of the year.

I came into today heavy on the stock short side and lighter on gold. I have lately taken about half those shorts off and picked up more bullion near 1660.

Let's see which way the stock and precious metal triangles

Net Asset Value Premiums of Certain Precious Metal Funds and Trusts

The European Union Is No Different Than Russia and China?

I was astonished, when I started to read what promised to be an interesting piece about the Fed swap lines, that Chris Whalen thinks that with regard to political and economic freedom there is no distinction to be made among Europe, Russia and China. Perhaps he is writing from the perspective of the banks, who are quite unhappy with some proposed European restraints.

"Many readers of The IRA

The Big Question: Are Funds At US Financial Firms Safe?

The short answer is 'maybe.' It is more of a buyer beware situation than most had thought, and still think.

It is nice to see someone in the mainstream media addressing this situation intelligently and without making an apology for what is apparently a criminal act and surely an egregious abuse of the public trust.

It is an axiom that it is not the initial crime that does the greatest and

Gold Daily and Silver Weekly Charts - Divvying Up the MF Gold and Silver

Do you think you own that gold you have in storage?

Maybe, maybe not.

This is nothing compared to what will happen in the event of a major default.

Bloomberg
HSBC Sues MF Global Brokerage Over 20 Bars of Gold, Silver on Deposit
By Linda Sandler and Tiffany Kary
Dec 9, 2011 3:24 PM ET

HSBC Holdings Plc (HSBA) sued the MF Global Inc. brokerage trustee to establish whether he or another

SP 500 and NDX Futures Daily Charts

This felt like a 'drift higher' day more than anything else.

The VIX fell.

Watch for a possible SP downgrade of Eurozone debt next week.

MF Global: The Issue Is Fraud and the Attempt to Cover Up a Wider Circle of Involvement

Janet Tavakoli does her usual great job of cutting to the heart of the matter. Below is an excerpt of her Huffington Post piece on MF Global today.

I keep thinking that nothing will shock me anymore in this US financial fraud fest. But the coverup of the MF Global stealing of customer money in a cloud of legal doubletalk, supposedly the one pristine and untouchable principle on Wall Street, is

Not a Clue: What Happened to the MF Global Customers' $1.2 Billion?

Jon Corzine said today that he does not know what happened to the missing $1.2 billion in customers' money.

If the CEO does not know, and if the regulators do not yet know, how can we possibly know?

But it's fun to take a guess. Here is mine.





The Truth is out there.

Gold Daily and Silver Weekly Charts

Gold is cheap relative to the idea that you could have a life’s fortune on a statement from a clearing agent and then find out that you don’t have a penny left anywhere. Which should you have had, physical gold or that clearing house statement? Gold is cheap because of the condition of other things.

Jim Sinclair
There was a very obvious drop in gold today. It was coincident with a decline in

SP 500 and NDX Futures Daily Charts - Ugly Selloff Into the Close

The US equity long only fund managers would dearly like to rally this market to ensure their year end bonuses.

And once again they made a play to take the markets off their lows this afternoon, until another report (rumour) swept the market that Germany would not back any new treaty proposal tomorrow.

And so the markets sold off and went out very near their lows.

Texas Instruments lowered

CFTC Issues A Clear Statement: MF Global Customers Have Priority In This Bankruptcy

"A good parson once said that where mystery begins, religion ends. Cannot I say, as truly at least,
of human laws, that where mystery begins, justice ends?"

Edmund Burke
Jill Sommers, the CFTC Commissioner who is leading the investigation into the MF Global bankruptcy gave some important testimony to the House today that has been overshadowed by the expected appearance of Jon Corzine.

If

Corzine To Take the 'CEO Defense' - The Re-Hypothecation Scheme - Customers Have Priority

"I will be as harsh as truth, and as uncompromising as justice. On this subject, I do not wish to think, or speak, or write, with moderation. Tell a man whose house is on fire, to give a moderate alarm; tell him to moderately rescue his wife from the hand of the ravisher; tell the mother to gradually extricate her babe from the fire into which it has fallen; but urge me not to use moderation in

Gold Daily and Silver Weekly Charts - Flight to Safety Lifts Gold

Just about everything is coiling for a move.

SP 500 and NDX Futures Daily Charts

A light volume, headline-driven market.

There is a lot of desire on the Street to rally stocks into the year end.

Europe is a stumbling block.

What Is the Primary Trend In Gold?

The market maven Richard Russell often speaks about 'the primary trend' in certain assets and markets.

I speak of it as the fundamentals, and also the primary trend.

Someone asked, "What is the primary trend in gold?"

Here is the big picture chart with the trend marked in green.




The primary trend in gold is being driven by two major fundamentals:
1. The Central Banks were net sellers of

Gold Daily and Silver Weekly Charts - Another Bear Raid Down to Support That Fails

There are a lot of 'fingerprints' on the tape these days.

The bear raid in bullion diverged significantly from the miners this morning, as the wiseguys were playing the old fake 'em and take 'em on the public.

Intraday commentary on that topic here.

What next? The markets are looking for a BIG move on Friday based on European headlines. They may not get it, whatever it turns out to be, but

SP 500 and NDX Futures Daily Charts - Pop and Flop

Another wide ranging day that accomplished very little, and on light volumes.

The option purchasing is showing a lot of convexity. People are looking for a big move on Friday tied to the European summit meeting. They just don't agree on which way it will move.

The Gold Bull Market Back to the Cup and Handle in 2010

I am probably going to truncate the existing daily gold chart again because it is becoming a bit unwieldy. As you know I reduce its scope occasionally to facilitate showing it on the cafe blog.

But for those who asked for it, here is a copy of the 'big picture chart' showing the original breakout formation of the cup and handle going back to 2010.

You may not be able to view it here, but

Intraday: Today's Gold/Silver Cross Trade Between Bullion and Miners Seemed Particularly Blatant

Here is a message to some trading friends this morning with gold around support at 1710.

They normally hit the miners hard before a smackdown in gold and silver. They did this on Friday. But today we saw the opposite happening, at least this morning. Earlier I had sent out a message saying, 'I think the bottom is in.'

Denver Dave and I had come to the same conclusion after some email

Categorizing Those Unemployed by the Recession Caused by the Financial Crisis

Words like 'shameful' and 'national disgrace' do come to mind.

Rutgers University Working Paper
Categorizing the Unemployed by the Impact of the Recession
By Dr. Cliff Zukin, Dr. Carl E. Van Horn, and Charley Stone

In August 2009, the John J. Heldrich Center for Workforce Development at Rutgers, The State University of New Jersey began following a nationally representative sample of American

Gold Daily and Silver Weekly Charts - Light Volumes and Frivolous Day Trader Markets

“The world is short water, energy, & commodities. We’ve under-invested in our natural resources as a society and as a consequence, we’ll see higher prices around the globe.”

Mark Cutifani, CEO, AngloGold-Ashanti
Gold was hit early on, and silver shortly followed, despite the rally in stocks and the falling dollar.

This struck me as price manipulation tied to the settlement negotiations that

SP 500 and NDX Futures Daily Charts - Light Volumes and Rumours

The stock markets rallied early on with the news that a deal had been struck between German and France.

The volumes were very light and lacked conviction with little follow through even as the SP 500 seemed to break out of its triangle formation.

In the afternoon another headline swept the markets, that Standard & Poors would be placing the entire Euro zone on ratings watch depending on what

Net Asset Value of Certain Precious Metal Trusts and Funds

The Difference Between Eurodollars and M3 Eurodollars

My friend Bart at Nowandfutures.com and I have discovered the cause of the discrepancy between his, and presumably John Williams' estimate of Eurodollars for their M3 estimates, and the BIS reports of Eurodollars.

The Fed's estimate seems to be limited to foreign branches of US banks only.

The Board of Governors of the Federal Reserve discontinued the Weekly Report of Eurodollar Liabilities

Gold and US Official Debt Instruments Held by Central Banks

If the Eurodollars chart wasn't enough heartburn for the paper-huggers, here is a chart from Ed Yardeni showing the correlation between the price of gold and the amount of US Treasury and Agency Debt held by Central Banks.

Personally I like to track the Eurodollars and the real interest rates, but this works about the same as I had suggested.   Central banks are not profit-seeking

Gold, Eurodollars, and the Black Swan That Will Devour the US Futures and Derivatives Markets

The Eurodollars estimate in the chart below is based on the BIS Banking Statistics from Commercial Banks and may not include official reserves held by Central Banks. 

As you know the Federal Reserve stopped reporting Eurodollars some years ago, with the consequence that it also stopped reporting M3 money supply.

I like to think of Eurodollars and banking system derivatives as the Fed's

Gold Daily and Silver Weekly Charts

Gold and silver popped with stocks today, but gave up most of their gains into the close.

I think this is a period when they pause, and will tend to follow stocks at least for the short term as the markets move up and down with rumours and headlines.

The fundamental trend is still very much intact. And the recent Fed activity in providing more dollars to Europe will at some point trigger a

SP 500 and NDX Futures Daily Charts - Second Flop, One More Try At Most

This is the second day in a row that the SP 500 has 'popped and flopped' in a failure to advance its admirable weekly gain on the back of the Central Bank initiative to make more dollars available globally.

The big drop in the headline unemployment percentage was totally misleading.  And we took some shorts near the apex of that pump and dump,  flipping them into the close. 

So what next?

Euro Dollars - The Great Dollar Overhang and Missing M3 Component - Gold and Silver

These figures are from the Preliminary BIS Reports of November 2011 which reflect reporting bank positions as of the Jun 2011 quarter. Obviously therefore they do not yet reflect the recent Fed expansion of the swap lines for dollars.  The first chart represents the total dollars held by banks as 'foreign currency.'

As you will recall, a 'euro dollar' is any US dollar being held overseas, in

Gold Daily and Silver Weekly Charts - The Pause That Refreshes?

I changed the weighting of the long gold - short stocks pair back to 'neutral' to slightly short.

There might be some tax loss selling in early December and headline risk remains highly elevated.

Still it is wise not to underestimate the Fed's willingness to debase the currency for their friends.

As a reminder, the Non-Farm Payrolls Report is tomorrow.

I still think the Europeans should

SP 500 and NDX Futures Daily Charts - Wall Street Talking Up a 'Santa Claus Rally'

The SP 500 has managed to work its way back into the symmetrical triangle from which it had broken down, with a lot of help from Bernanke and the western Central Banks.

Let's see if they can hold it here, and even break out. Headline risk remains elevated, and nothing has really changed except for a short term blast of dollar liquidity.

As a reminder, tomorrow is the Non-Farm Payrolls Report

The Y-T-D Performance of Various Assets: Gold, Silver, US Stocks, Bonds, and AAPL





Doing Nothing Is Still Making a Choice
And the winner is gold, at least for now with one month left in the year.

I included AAPL because it is the poster child for the stock rally and is often touted by shills for Wall Street and the hedge funds as a superior investment amongst stocks on chat boards and 'news programs.'

It should be noted that recently the US 30 Year Bond has

The Other One Percent: Corporate Psychopaths and the Global Financial Crisis

Anyone who has ever worked in a large corporation has seen the empty suits that seem to inexplicably rise to positions of power.  They talk a great game, possessing extraordinary verbal acuity, and often with an amazing ability to rise quickly without significant accomplishments to positions of great personal power, and often using it ruthlessly once it is achieved.

Their ruthless obsession

Gold Daily and Silver Weekly Charts - Crony Capitalism and More On Modern Monetary Theory

Bernanke and the western Central Banks stepped in to provide a jolt to the paper markets, and of course, the commodity markets including precious metals.

Intraday commentary on this here.






Steve Schwarzman, Chairman (and co-founder with Peter G. Peterson) of Blackstone and a Prince among crony capitalists, was on Bloomberg television today. Blackrock is the world's largest private equity

SP 500 and NDX Futures Daily Charts

What European crisis? What Bank downgrades? lol

As a reminder, today was the end of the month, and the funds had a lot of catching up to do after one of the worst Thanksgiving week markets on record.

Currency Wars: Fed Acts To "Increase the Availability of Dollars Outside the United States"

Several people have asked what I think about this.

I wrote about this just yesterday.   I could not ask for a better straight man than Ben Bernanke.

"I think the major monetization is already occurring in the Eurodollar markets, and an ongoing stealth bailout of European debt, in order to save the big money center banks at home and broaden the reach of the Dollar.

And this is why the Fed

$500 Million in Missing MF Global Customer Money Found in London and at JPM

As predicted, the London operations of MF Global, the group that received bonuses the day before the bankruptcy filing, was apparently involved with the 'misplacement' of customer account money. And some of that customer money was in the hands of JP Morgan.

Bloomberg
KPMG Recovered $500 Million of MF Global U.K. Client Assets
By Kit Chellel
Nov 29, 2011 2:12 PM ET

MF Global (MF)’s U.K.

S&P Cuts Credit Ratings On 37 Global Banks

If Europe wobbles any harder, the global money center portion of the financial sector may slide into the sea. Or more likely onto the backs of the unsuspecting public.

I will be surprised if they do not try and rally stocks in the face of this to put the brave face on and whistle past the graveyard once again. This is what traders like to do when they have been caught offsides by the news.

Gold Daily and Silver Weekly Charts - S&P Downgrades the Credit of Most Big US Banks After the Bell

Intraday commentary on gold, silver and the world currency situation here.

American Airlines declared bankruptcy today.

After the bell S&P downgraded JP Morgan, UBS, Wells Fargo, Citi, Goldman, Bank of America et al.

"Bank of America Corp. (BAC), Goldman Sachs Group Inc. and Citigroup Inc. (C) had long-term credit grades downgraded to A- from A by Standard & Poor’s after the ratings firm

SP 500 and NDX Futures Daily Charts - Bank of America And Citi Credit Ratings Cut After the Bell

American Airlines declared bankruptcy today.

After the bell the credit ratings of Bank of America and Citigroup were cut from A to A- with a negative outlook.

Additional news includes other banks including Goldman, UBS and JP Morgan.

One of my friends remarked during the day that the banks index was lagging badly, but it was not fully reflected in the SP 500 futures. Perhaps now we see

Currency Wars: The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver

"It is only with the heart that one can see rightly; what is essential is invisible to the eye."

Antoine de Saint Exupéry
'Nominal GDP targeting' is a way of raising the Fed's inflation target without admitting to it explicitly.

Nominal GDP means that one can meet their growth target simply by inflating the money supply to make up the difference between 'real growth' and 'headline growth.' 

Gold Daily and Silver Weekly Charts

After the bell, Fitch reiterated the US AAA credit rating but changed the outlook from stable to negative.

"The Maastricht treaty set a limit of 60% for Government debt as a Percentage of GDP. As of May, 2011 only 4 of the 17 countries in the Euro-zone are below this requirement. The worst violators of the debt limit requirements are probably obvious: Greece at 157.7%, Italy at 120.3%, Ireland

SP 500 and NDX Futures Daily Charts

A reversal, with a big gap open, that so far has retraced the first Fibonacci level. It needs to do better in order to be counted more than a dead cat bounce given the oversold condition stocks had been in.

The market remains headline driven, and 'skittish' to say the least.

Gold Daily and Silver Weekly Charts

Still running short stocks and long bullion.

No real trading today in this thin holiday market.

SP 500 and NDX Futures Daily Charts

Will stocks really fall all the way to the bottom of the channel?

The big support may be a big test. It is obvious on the charts.

Warren Pollock: Open Letter to the CME

Wednesday, November 23, 2011

Open Letter to the CME
To: Terrence A Duffy, Chairman CME Group

As illustrated by the failure of MF Global, I am of the opinion that, the CME has not met its basic obligations to the marketplace as a “public fiduciary.”

Our society depends on “basic finance” to provide “utility functions” such as banking, hedging, insurance, and/or capital formation. Presently,

Franklin D. Roosevelt's 1942 Thanksgiving Proclamation - Kipling's Caution to the Empire

"It is a good thing to give thanks unto the Lord."
Across the uncertain ways of space and time our hearts echo those words, for the days are with us again when, at the gathering of the harvest, we solemnly express our dependence upon Almighty God.

The final months of this year, now almost spent, find our Republic and the nations joined with it waging a battle on many fronts for the preservation

Gold Daily and Silver Weekly Charts - Post Option Expiration Gut Check Doesn't Stick

US stock markets went out on their laws, roiled by a failed bond auction in Germany.

Gold and silver received their traditional post option expiration smackdown, designed to pry any new futures position out of the hands of any specs who happened to have held in-the-money calls after yesterday.

The US will be closed tomorrow, and staffed by junior employees on Friday. So eyes will be on the

SP 500 and NDX Futures Daily Charts - Out on the Lows

A failed bond auction in Germany cast a pall over the holiday markets in the US.

Stocks went out on their lows in thin trading.

Pigs 'R' Us - The Wall Street Groupon IPO

And it is...

When I play cards with the little girls, they make up new rules on the fly and sometimes cheat outrageously, palming cards and sneaking money from my pile of coins, so that we all laugh about it. They know that I know, and that I am being tolerant. They enjoy sneaking up on me, and jumping out of cupboards and behind doors. And I always act surprised, but never am.

After all,

CME Boosts MF Global Guarantee - Corzine & Gensler Called to Testify At House Hearing

It is good to hear of the increasing likelihood that the customers will be repaid. It may take some time for full repayment.

It is also good that Corzine, Gensler et al. are being asked to appear before the Congress. The article does not mention subpoenas, or whether the testimony will be sworn.

The facts of the case will most likely be buried under a smokescreen of 'accounting errors' and

Gold Daily and Silver Weekly Charts - Bounce Back from the Smackdown

Silver would not be denied.

Keep an eye now on the December delivery process in the metals at the Comex.

All eyes on Europe and the US financials.

SP 500 and NDX Futures Daily Charts

Light volumes. Some recovery from the daily low on the Fed minutes.

This gave a little cheer to a market that was digesting a weaker than expected GDP number.

The adults have left the building for the holiday.

All eyes on Europe.

Bank of America was warned by its regulators to stiffen up its assets.

The futures finally closed at 1180.75 which is important support.

JPM to Buy MF Global's Stake in the London Metals Exchange

JP Morgan to buy MF Global stake in LME
By Douwe Miedema
LONDON Tue Nov 22, 2011 9:55am EST


(Reuters) - U.S. investment bank J.P. Morgan (JPM.N) is set to announce it has bought a 4.7 percent stake in the London Metal Exchange for 25 million pounds ($39.1) from defunct U.S. brokerage MF Global, a person familiar with the situation said.

An announcement could come as early as this week, the

The Right of the People Peaceably to Assemble and Petition the Government

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.



First they came for the Socialists, and I did not speak out --
Because I was not a Socialist.

Then they came for the

Tavakoli: MF Global Revelations Keep Getting Worse

“The moment the idea is admitted into society that property is not as sacred as the laws of God, and there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

John Adams
MF Global is one of the most outrageous and brazen abuses of customers by Wall Street insiders that I have ever seen.

That it has been receiving so little attention by the mass media

Gold Daily and Silver Weekly Charts - December Option Expiration Tomorrow

"Of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of plutocracy."

J. Pierpont Morgan
As you may recall I warned several times over the past two months that this option expiration would get 'hit' because December is a big delivery month.

And so it has.

I am going to reset the upward curve on the gold daily chart to wherever this

SP 500 and NDX Futures Daily Charts - Much Ado About Nothing

“The boom, not the slump, is the right time for austerity at the Treasury.”

John Maynard Keynes, 1937

Light volumes and the markets were in the profit-taking mood on the back of JPM's slam on metals.

Anyone who was surprised in the least by the Super-Committee's inability to reach a deal should not be allowed to roam about without a chaperone, as they might hurt themselves.

The whole point

Bernanke For A Day

The San Francisco Fed has provided us an online game that is presumably meant to be instructional as well as 'fun.'

After a few tries to test out its assumptions, I have been able to 'win it' pretty regularly, winning being defined as appointed to another term. It is very one dimensional so it gets old rather quickly.

One is hit with various oil and currency and fiscal shocks and surprises,

Trustee Says MF Global May Have Stolen $1.2 Billion in Customer Funds

"The infectiousness of crime is like that of the plague."

Napoleon Bonaparte

Ironically a reader sent me their analysis yesterday that showed that the losses were $1.2 Billion. The twist here is that the Trustee may be accruing those losses to the customers even where there is some discretion.

One would think that the customers should be paid first out of all MF Global creditors. But I

Net Asset Values of Certain Precious Metal Trusts and Funds

Tomorrow is Comex Options Expirations for Gold and Silver.

Someone remarked this morning that the monied interests seem to be increasingly brazen in their actions.

I have had the opportunity to discuss these things with people more experienced than myself over the years. Before he passed on, a fellow Republican and economist Pierre Rinfret and I had a number of conversations about this.   We

Update on MF Global: Interview with James Koutoulas of he Commodity Customer Coalition

"When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle."

Edmund Burke
James Koutoulas is CEO of Typhon Capital Management and recently founded the Commodity Customer Coalition (CCC), comprised of over 7000 customers of MF Global. As an attorney and spokesperson for the CCC, Koutoulas has an inside persective on the legal

James Turk Interviews Eric Sprott About Gold and Silver

Gold Daily and Silver Weekly Charts - Brother, You Ain't Seen Nothing Yet

"In a society built largely on confidence, with real wealth expressed more or less inaccurately by pieces of paper, the entire fabric of economic stability threatened to come toppling down."

New York World, October 25, 1929


"In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could."

Rudy Dornbusch
Next week is a

SP 500 and NDX Futures Daily Charts

Some decent swings but overall a quiet stock option expiration today.

Next week is a holiday shortened week in the US.

It will be marked by a metals option expiration on the Comex, and the results of the Congressional 'SuperCommitte' on the US budget deficit.

Headline risk from Europe is very high.

US Corporate Taxes As a Percent of Corporate Profits

"Once upon a time, the corporate income tax generated a significant share of tax revenues; now, it’s bumping along in the 2%-of-GDP range. Yes, the marginal rate of corporate income tax is high, at 35%. But US companies are extremely good at not paying that.

But at least we know the aggregate amount that corporations pay in taxes. What we don’t know — because they won’t say, and no one’s

Poll Results: What People Are Thinking

These are the top six themes from our poll.

There was a huge drop off in votes after number six.

There was a pleasant understanding of the role of money and corporations in the readers' selections.

Gold Daily And Silver Weekly Charts

"Never argue with a fool, because they will only drag you down to the level of stupidity, and then beat you with their experience."

Michel de Montaigne
Today was December Option Expiration Metals Takedown Part Deux. As you know the actual expiration will be next Tuesday.

The pampered princesses of Bloomberg TV spent most of the morning alternatively frothing and tittering about the protesters

SP 500 and NDX Futures Daily Charts

Tomorrow is option expiration on stocks.

The sell off today seemed a little 'technical' to me. Although the symmetrical triangle has broken to the downside, I don't count it ahead of an option expiration unless they can take it and book it into the weekend and hold it on Monday.

Next Tuesday is metal expiration on the Comex.

Net Asset Value of Certain Precious Metal Trusts and Funds

The December Option Expiration on the COMEX is next week.

US trading will be thin in the holiday shortened week.

Change is in the air. But the biggest changes come slowly, over a long priod of time, and then suddenly make themselves known when the truth is revealed.

I am showing the NAVs and their premiums in the morning and in the afternoon.

Even yesterday some of the premiums were

MF Global: Customers Appeal an Apparent Conflict of Interest With the Bankruptcy Trustee

It's the scandal that keeps on giving.

A party associated with The MF Global Customer Coalition has sent a letter to Judge Glenn asking him to reverse the appointment of James Giddens as Trustee for the MF Global Bankruptcy case.

Apparently Mr. Giddens law firm's largest customers and his own clients in other matters are J.P. Morgan and Price Waterhouse.

J. P. Morgan at least has enjoyed a

Gold Daily and Silver Weekly Charts - Swan Dive on a Statement of the Obvious

The market was running the usual daily routine, with stocks grinding higher and gold under pressure, but in the last hour Fitch came out and warned of US bank exposure to Eurozone debt, and stocks folded quickly, and took gold and silver down with them.

The US dollar was remarkably lacksadaisical. Option expiration in the metals is next week. And it is a holiday shortened week in the States

SP 500 and NDX Futures Daily Charts - Headline Risk

It had appeared that we would see the usual routine, a low opening and a steady grind higher all day as the wiseguys bought the dip, and 'tried to take it up' as they like to see.

However, headline risk reared its ugly head to hammer stocks to their lows in the final hour of trading as Fitch Ratings warned of Eurozone exposure in US banks.

This market is thin. That means that there are few

US Federal Prosecutions For Financial Fraud In the Obama Administration Fall to 20 Year Lows

The declines in US Federal prosecutions for financial fraud  that began under G.W. Bush have followed that down trend that in the first three years of the Obama Administration. That might make more sense if Obama had not been elected as a reform president in response to one of the greatest financial frauds in American history. 

In the first three years of the Obama Administration, federal

CFTC Commissioner O'Malia Warns of 'Rash Reforms' - "Isolated Incident" - Opposes Position Limits

The CFTC must make haste to prove to the public that MF Global was an isolated incident. It should not become involved in the issues of returning customer funds.

Oh, such wiles are hidden in the voice of reason and 'free market' ideology. Let's not be hasty. After all, it is only customer money, and we are just the regulators responsible for making sure it didn't happen in the first place.

MF Global Customers to Propose Faster Distribution of Funds Than SIPC Trustee

Commodity Customer Coalition
190 South La Salle Street, Suite 3000
Chicago, IL 60603
www.commoditycustomercoalition.org
info@commoditycustomercoalition.org

November 16, 2011 FOR IMMEDIATE RELEASE

CONTACT: John L. Roe (jroe@btrtrading.com) 312-933-6564

Commodity Customer Coalition to Object to SIPC Trustee’s Claims Process for MF Global Bankruptcy, Propose Faster Alternative Claims Process

A CFTC Regulatory Change Opened the Door For MF Global Bankruptcy - And Worse

This is a very good analysis of how regulatory capture and the erosion of regulatory oversight opens the door wide for public loss and the defrauding of investors.

And it is also important to remember that in addition to bad investments, the MF Global scandal apparently involves the use of customer funds to meet margin calls for the firm's positions, which is a scandalous theft of funds.  And

MF Global Customer Fund 'Mystery' - Something Nefarious or Illegal Happened

If the customer funds are not returned, and justice is not done, then nothing and no one is safe from rapacious bankers and insiders who decide to seize your funds for themselves.

Anyone who is familiar with the markets and has a shred of decency is absolutely appalled by this outrageous theft from customer accounts and breach of fiduciary trust. And the wall of silence from the financial

Gold Daily and Silver Weekly Charts - What Time is the Next Swan? - And a Divertimento

What time is the next swan?

No I am not referring to the famous ad lib from Czech operatic tenor Leo Slezak.
"One of the most famous ad-libs in theatrical history came from the great tenor Leo Slezak. One night, while playing the title role in Wagner's opera Lohengrin, he ran into an unexpected problem. At the end of the opera, a swan appears at the back of the stage, drawing a boat that is to

SP 500 and NDX Futures Daily Charts

Stocks appear to be coiling for a move.

I am tending to take the short side here, in a paired trade with long gold without leverage. No miners. I adjust the mix intraday to try and capture some of the games as the wiseguys do a wash and rinse with the index.

I do not wish to be caught long until some semblance of order comes to the European debt situation. And not only is it not getting

Pigfest 2011: Bank of America/Merrill Lynch Is Offering To Buy Claims Against MF Global

Bank of America's Merrill Lynch unit is soliciting for the purchase of claims against MF Global.

As you may recall, Bank of America is one of the major creditors of MF Global with JPM, and is reported to be one of the Debtors, along with JP Morgan, involved in the litigation trying to obtain superiority of their claims over customers whose money was taken/lost/stolen by parties unknown for now

The Coalition of Customers of MF Global File a Motion To Release Their Funds

"It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes."

Andrew Jackson
The Coalition of Customers of MF Global filed a motion to turn down JP Morgan's legal maneuver to give the Bank a priority as a Debtor over the Customers whose $633 million in non-cash assets were apparently 'misplaced' by MF Global.  The location of the funds,

Gold Daily and Silver Weekly Charts - Who and What Is Safe?

With all the insider trading, ponzi schemes, accounting frauds, and misapporpriation of customer assets, investors have to be asking themselves, 'what is the real value of things, what are the hidden risks, and what is really safe anymore?'

So the average person seems to be flocking to US Treasuries, often held for them by brokers. This rush to paper dollars may be the last bubble, the great

SP 500 and NDX Futures Daily Charts

The overnight rally fizzled badly.

Stocks are struggling here, and on light volumes.

Headline risk remains high despite the improvement in the VIX, which is still rangebound.

Letter of Appeal Being Sent by MF Global Customers to the Congress and CFTC

Attached is a letter being sent by customers of MF Global to their Congressional representatives and the CFTC.

Here is the court filing that caused such consternation.

It is hard not to assume as some have already suggested that this Bank which filed this motion with the court was the recipient of the customer accounts in what appears at least on the surface to be a fraudulent conveyance of

Are BofA and JP Morgan Really Blocking the Return of MF Global Customer Money?

"Once you have their money, never give it back."

Ferengi, First Rule of Acquisition
Here is a white paper that suggests that JP Morgan and Bank of America are trying to subordinate the customers' claims to their stolen funds and keep them in a pool of money to be distributed to the creditors by the Trustee, without any representation for the customers.  This is said to be the cause of the

Credibility Trap: US Congressmen and Their Staffs Regularly Engage In Insider Trading

These dozen Congressmen are just the ones that would brag about it openly to Jack Abramoff.

Trading in insider information amongst the Congress and their staffs is a form of soft bribery that undermines the character of the legislation, and is a relative side dish compared to the huge amounts of lobbying funds being thrown around by corporate special interests.  And both parties are in on it

CME Group to Provide Funding to SIPC for MF Global Customers

I am glad for any relief that might be coming for the customers of MF Global whose funds are frozen and at risk.

I wonder how extraordinary these measures referenced in this press release really are, and why they had to be extraordinary given the guarantees presented by SIPC and the regulatory responsibilities of the Exchange in the first place.

As I recall the stated reserves of SIPC are

Gold Daily and Silver Weekly Charts - Rickards and Grant Discuss Money and Gold - Jack Kennedy

Gold and silver rallied back from the bear raid yesterday.

The correlation between metals and stocks is still troubling, but it does provide a ready hedge to bullion positions. This suggests that the metals are rising with liquidity and expectations of money printing, and that short term reductions in liquidity will drive the price lower.

Speaking of gold and money, here is a recent video

SP 500 and NDX Futures Daily Charts - Chart Formations and VIX

There was intraday commentary on the SP 500 chart that shows some important chart formations and levels of support and resistance.

The market rallied today on relief that Italy's bond prices relented somewhat, and consumer confidence came in 'better than expected.'

Volumes were light and the bond market and banks were closed for Veteran's Day.

Keep an eye on the European situation, as it

An Important Formation on the SP 500 Daily Futures Chart

The last few times these symmetrical triangles at rally tops have broken decisively to the downside.

We are in such a formation now. I have marked levels that might be good indicators of a breakout or breakdown and some short term targets.

I think the greater risk is to the downside while the European financial and political situation remains unresolved, but I do not wish to get ahead of this

The Heart of the Beast: The CME Group and the Failure of Financial Self-Regulation

This is a story about the first, albeit selective, potential default in the US by a major clearing exchange in the postwar period. And the cause of it remains a mystery, possibly by intent.

In the essay excerpted below, analyst Ted Butler brings out a key aspect of the failure of MF Global that has received far too little attention.

The self funding by the players of their industry's

MF Global Update - Why the Puzzling Delay and Lack of Disclosure? - JPM Jumping Queue?

Here is what I think and what I hear based on news and information from a variety of sources.

Obviously I cannot know the exact details or all the facts. And this becomes a little more speculative than normal, but that is the consequence of the lack of information and the cover up.

The facts are what the official investigation should uncover. Whether we find out what actually happened is

Curiouser and Curiouser: Missing MF Global Customer Funds May Be 'Massive Ploy'

And it appears that investor outrage is prompting a reaction amongst the regulators, as well it should. It is good to see that the CFTC is taking this seriously, and it is always good to hear from the 'can-do commissioner' Bart Chilton of the CFTC.

And it probably doesn't hurt to have SIPC on the hook for the funds as well.

Jon Corzine is a prominent Democrat who was said to be a candidate to

Gold Daily and Silver Weekly Charts - Forget MF, Think MMF Variable NAV

A bear raid today ran the stops, and a few miners were selectively taken out and severely beaten down.

But all of it was within the range of the current trends.  So it was easily ignored, except perhaps to round out some positions and add a few less familiar ingredients to the moveable feast of the shorter term portfolio.

I have mixed feelings on silver. I am less constructive of it in the

SP 500 and NDX Futures Daily Charts

Technical trade off the bottom of the trading range.

Europe is still the driver of the financial markets.

If you think this volatility is bad, wait until next year. It will probably make this trading environment look like a 1950's snoratorium.

People forget, and no where do they forget more quickly than in the swings between greed and fear on Wall Street.

It's Official: Wall Street Firms May Legally Steal From Their Customers - Rationalizations to Follow

...and they may not have to pay them back, even when they are caught. The customers will be expected to 'take one for the team,' and for the good of the system. Confidence and all that.

“This means they can take segregated funds and leverage them to kingdom come. It means nothing is safe.”

Andy Abraham
If you have a commodity account with Wall Street, they may gamble with your money, with

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

I came in to the market with a bias heavily short, on a bet that the resistance on the charts would hold, and the wisequys were doing a classic pump and dump. And so they seem to be.

Gold and silver took a hit that looked like a correction more than anything else, and it provided an opportunity to round up some of the bullion positions while trimming off the shorts.

It is hard to predict the

SP 500 and NDX Futures Daily Charts - Wall Street Goes Bunga Bunga

"Why this resignation [by Berlusconi] without an heir apparent introduced 'certainty' eluded me somewhat.
I suspect that the Wall Street wiseguys are planning their own version of death by bunga bunga for the investing public."

Among the things that the US can no longer afford, at the very top of the list is a parasitic financial community setting up opportunities for looting the public trust

MF Global's Customer Assets - STOLEN - And Nothing You Hold In This System Is Safe

As suspected, MF Global brazenly took liquid assets like Treasuries and warehouse receipts, but not cash which would have been more quickly missed, from customer accounts to post as illegal collateral for emergency funding with a lender who must have known that they were receiving stolen goods.

When things fell apart, the lender simply took the collateral and liquidated it, and kept the money.

Risk Off

From last night:

"Why this resignation [by Berlusconi] without an heir apparent introduced 'certainty' eluded me somewhat.

I suspect that the Wall Street wiseguys are planning their own version of death by bunga bunga for the investing public."

Just another wash and rinse. Key support in the futures has held so far. Wax on, wax off.

Attention:
General Counsel, Chief Executive Officer and

Gold Daily and Silver Weekly Charts - La Douleur - Berlusconi Boogie Woogie

It was Risk ON as the markets rallied on news that the Italian PM Signor Berlusconi will be resigning after an austerity vote.

The rumours that he is being recruited as a Republican presidential candidate are probably mistaken, although he would blend.

Why this resignation without an heir apparent introduced 'certainty' eluded me somewhat.

I suspect that the Wall Street wiseguys are

SP 500 and NDX Futures Daily Charts - Risk ON

It was definitely Risk ON as the markets rallied on news that Italy PM Berlusconi will resign after the austerity vote.

Why this is a rationale to take on more risk eludes me, and I tended to view today as what we call 'technical trade.'

The VIX did fall, but is still within a range.

GATA: The Men In the Arena

This is for my friend Bill Murphy, and his colleague Chris Powell, of GATA.

We who invest in precious metals owe them a deep debt of gratitude and respect for their long and sometimes lonely fight, against often fearsome odds and tough criticism, to bring transparency and honesty to the markets.


"Today I shall speak to you on the subject of individual citizenship, the one subject of vital

Gold Daily and Silver Weekly Charts

The metals ripped higher, with gold tearing through key resistance at 1780 and running up to 1800 into the close.

Now that the bulls have stuck a close here, they need to hold it and post a weekly close in the 1780+ area.

If they can do this then the next big trial will come with the December option expirations, barring fresh headline jitters.

As noted on the chart, the last big smackdown

SP 500 and NDX Futures Daily Charts - No Fear, No Conviction - Flash Ready Market

For all that is going on the complacency amongst the pros is remarkable. There are wild swings in the futures overnight, the markets come in lower each morning during the retail trade, and the wiseguys buy the dip.

No fear. But I wonder how much conviction there is as well.

ICE Follows CME in Lowering Margin Requirements to Mute MF Global Impact

ZeroHedge initially misinterpreted the somewhat vague release from CME, raising an alarm amongst a number of people who sent it to me. And a number of people have since been critical of their mistake, which from what I could see was understandable. The CME release was very misleading.

ZH has since corrected it. And the ICE release makes the exchanges' intentions abundantly clear. When you

Gold Daily and Silver Weekly Charts - Liberty Without Virtue


"But what is liberty without wisdom, and without virtue? It is the greatest of all possible evils; for it is folly, vice, and madness, without tuition or restraint."

Edmund Burke


Bloomberg Magazine Advertisement
GroupOn = LinkedIn?

La la la, whatever. La la la, doesn't matter. As cynical an IPO as seen since 1999 they said today.

Where is the MF Global customer money? First it was

SP 500 and NDX Futures Daily Charts

As fraudulent enterprises go, the US markets were relatively calm today in the face of uncertainty in Europe and a rather weak Jobs Report.

Perhaps the disconnected nature of the nation's money, its profound alientation with respect to the real economy, is the key to the market's increasingly erratic behaviour, and the remarkable silence of the lambs.





"Resplendent and unfading is wisdom,

CFTC Update on the Investigation Into Manipulation of the Silver Market In Progress Since 2008

The CFTC released a long awaited update on their investigation into the manipulation of the silver market, thereby meeting a key deadline to the public.

November 4, 2011

CFTC Statement Regarding Enforcement Investigation of the Silver Markets

Washington, DC – The Commodity Futures Trading Commission today issued the following statement:
“In September of 2008, the Commission announced the

MF Global: $658 Million in Missing Customer Funds Found in Account at JP Morgan - Maybe

Government Of the People, By the People, and For the People
According to Bloomberg, $658.8 Million in what could be the 'missing customer funds' were 'found' today in an account at JP Morgan.

I know how it is.  Sometimes you forget to check your coat pockets and miscellaneous bank statements too. Sloppy bookkeeping. Tsk tsk. Oh well, just an honest mistake, right?

JP Morgan is one of the

The Disappointing Non Farm Payrolls Number: An Early Christmas 'Goose' Stuffed with Baloney

The Birth-Death Model was out of normal to the high side enough to raise a comment. This is shown in the first slide. Lately the BLS statisticians had not resorted to this and had actually been running at estimates a little more to what one might expect in a business slump.

The headline number without the Birth Death model, deseasonalized, showed negative growth.

So the truth is probably that

MF Global: The Mother of All Margin Calls

No, not the credit default implosion of the company itself. This is about the customers whose money was misappropriated.

The treatment of the non-insider investors and speculators by Wall Street is often shameful. This may be one of those times.

I think this has driven some of the recent trading, as the wise guys take advantage of the specs.

Brace for more odd swings in the markets.

Gold Daily and Silver Weekly Charts - A Pervasive Sense of Disestablishment

"Terror... often arises from a pervasive sense of disestablishment: that things are in the unmaking."

Stephen King
Big up day for the metals.

I do not care for their synchronicity with stocks. So many assets are now correlated to a global reflationary event, and the markets are overly sensitive to headlines. That makes these markets highly dangerous.

What is happening with MF Global and the

SP 500 and NDX Futures Daily Charts - Here Comes Groupon

"The wolf thought to himself: 'What a tender young creature! what a nice plump mouthful.-- she will be better to eat than the old woman. I must act craftily, so as to catch both."

The Brothers Grimm, Little Red Cap

The Wall Street wiseguys are shoving the Groupon IPO out the door tonight I hear.

It *could* do well, but it strikes a kind of a chord for a high water mark in the post 2008

Gold Daily and Silver Weekly Charts - La Douleur du Monde

The metals had a nice rally today after the post-option expiration gut check.

Benny cooed some reassuring words but did nothing.  The equity markets rose for lack of anything better to do.

Gold and silver have not yet broken out and set the 'W Pattern' with a strong close above resistance around 1780.

If they can stick a strong close the year end target of 1950 is activated.  Right now I

SP 500 and NDX Futures Daily Charts - Much Ado About Very Little

Benny reassured the markets without really saying anything.

FOMC November Statement - G20 and Greek Debt - Bernanke at 2:15 - NFP Friday

"Everybody was expecting Tim Geithner and Bob Rubin, who's pulling the strings behind the scenes in the Obama Administration, to roll out some kind of IMF funded bailout for Greece in a global reflation. Your audience would love that.

It hasn't manifested itself yet. Supposedly at the G20 meeting next month, Obama was going to declare the jubilee and have the IMF just print money to bail out

Gold Daily and Silver Weekly Charts - MF Global Is the Tip of a Pyramid of Lies

"The great masquerade of evil has played havoc with all our ethical concepts.

For evil to appear disguised as light, as charity, as historical necessity, or social justice is quite bewildering to anyone raised on traditional ethical concepts.

But for the Christian who builds his life on the word of God, it merely confirms the fundamental perversity of evil."

Dietrich Bonhoeffer

MF Global,

SP 500 and NDX Futures Daily Charts - MF Global Admits Taking Customer Funds

Tough down day on the US equity markets.

I have a hunch that the Wall Street crew will circle the wagons, and that MF Global will suddenly 'find' the 700 million or so in customer funds in some misplaced account.

One after another, all will be led down an alley and strangled, for the sake of systemic corruption, starting with the truth.

MF Global Admits Misappropriating (Taking) Customers' Money For Their Own Purposes (Gambling)

Who do they think they are, the NY Fed?

AP
MF Global says it used clients' money
Tue Nov 1, 2011 2:42pm EDT

Nov 1 (Reuters) - MF Global Holdings Ltd ., the futures broker that filed for bankruptcy protection on Monday, has admitted to using its clients' money as its financial troubles mounted, AP reported, citing a U.S. official.

An MF Global executive made the admission to federal

Net Asset Value of Certain Precious Metal Trusts and Funds

I would like to know the details of how Sprott Silver is managing its cash, and whether it holds any units of the fund back for occasional cash sales.

Regulators Searching MF Global for Millions in Missing Customer Funds

Do you know where your account funds or assets owned through ETFs really are?  Do the regulators and overseers of the markets?  Do they care, or just look the other way?

NYT Dealbook
Regulators Investigating MF Global
By BEN PROTESS, MICHAEL J. DE LA MERCED and SUSANNE CRAIG

Federal regulators have discovered that hundreds of millions of dollars in customer money have gone missing from MF

Gold Daily and Silver Weekly Charts - The Golden Bowl

Is this the long awaited gut check for the longs?

A natural pullback after such a strong rally.

Let's see where it goes next.





"Related Disciplines"

SP 500 and NDX Futures Daily Charts - MF Global Declares Bankruptcy

A strong October as one of the most dangerous of market trading months goes.

Keep an eye on Europe.

This market is triple black diamond, full of hidden risks, much of it caused by corruption and lax regulation.

Reprise: The Causes of the Financial Crisis and the Obsessive Folly of Greed

"There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history—a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So

Gold Daily and Silver Weekly Charts

I was out most of the day.

The markets were quiet, digesting the recent developments in the US domestic economy, but especially with the European debt situation.

See you Monday.

SP 500 and NDX Futures Daily Charts

Gold Daily and Silver Weekly Charts - A Possible Breakout on Debt Monetization in Europe

The 'gut check' in metals was very short-lived, as the precious metals rallied with the melt up in financial assets on the debt monetization plans out of Europe to save their banks.   It was 'risk on.'

What next? We may have some follow on, but continued upside depends on additional QE3 from the Fed, as well as the actions by all the world's central banks to monetize the private banking debt

SP 500 and NDX Futures Daily Charts - Time To Go On Bubble Watch

A massive rally in US equities today led by financials as there was relief that Europe will be bailing out the sovereign debt of some of their members, and most importantly of all, the large European and US banks.

The US GDP came in well. Intraday commentary was provided, and it was a hollow victory as household income continued to decline.

I think the stock rally may have more to go, but

The US GDP Report

One picture is worth a thousand words...

Buffaloed Tim and Howdy Bernanke

Gold Daily and Silver Weekly Charts - La Douleur du Monde

Another nice up day in the metals running a bit counter to commodities.

Gold finished around the big resistance of 1720. Today was a quiet expiration and it may be that the new holders of futures, compliments of their 'in the money' calls, will be given a gut check tomorrow or the next day.

But the news and the headlines from Europe are so dominant in this market that this is the primary

SP 500 and NDX Futures Daily Charts - Hope Floats, and So Does This Market

A bit of a drift higher with a short squeeze based on a report (rumor) that China will ride in on a white horse and bail out Europe by buying their euro bonds.

This is a very mixed market and headline driven. So we wait for the next headline which is what it will take to fuel a sustained rally if it is favorable and substantial.

Bill Black: What I'd Demand of the Fed - Fire Bernanke and Geithner

I think this is a superb list, but a bit misdirected, because as is obvious from my title, the advice ought not to go to the Fed, but to the government in Washington. Timmy is Ben's colleague and quasi-boss, and the problems are intertwined.

That takes nothing from Bill Black who would be an appropriate choice to head one of the big regulatory agencies. And it is unlikely that Obama would

The Ghosts of Modern Monetary Theory

«Le papier-monnaie revient finalement à sa valeur intrinsèque - Zéro.»

Voltaire

Turk and Keiser Discuss the French Experience with L'illusion de la Monnaie Fiduciaire

American Psycho Redux

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

Charles Mackay
The US is remarkable, not for any unusual distribution of psychopaths amongst its people, but rather for the high regard and admiration in which the more articulate and successful psychopaths and sociopaths among their ranks are

A Nation Run Not By Shopkeepers, But By Con Men, Protection Rackets, and Swindlers

"And remember, where you have the concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."

Lord Acton
Income inequality such that it suppresses the middle class is a practical policy problem for what I hope are obvious reasons of inadequate demand and economic stagnation.  As the US currently has one of the most extreme

Gold Daily and Silver Weekly Charts - Comex Option Expiration Tomorrow

It was 'risk off' today as domestic economic news was weak and Euro-optimism was subdued.

There was intraday commentary on today's somewhat unusual rally in gold and silver here.

The economy in the US continues to weaken, and the political leadership seems preoccupied with doing more trickle down favors for their wealthy contributors.

There was an interesting divergence as gold and silver

SP 500 and NDX Futures Daily Charts

Markets took a pause today on less optimism on Europe and domestic US recovery.

Keep an eye on the sovereign debt situation in Europe because that is a primary short term driver of this market.

Amazon missed and lowered after the bell, and so is getting hammered a bit in the late trade.

The US economy is not recovering and the plans being put forward for change are not likely to help anyone

Net Asset Value of Certain Precious Metal Trusts and Funds

The Next Two Dates to Watch for Comex Option Expiration in the Metals

Keep an eye out for the next two Comex option expirations in the metals, both tomorrow 26 October but in particular the December expiry on 22 November. Perhaps not so much tomorrow but the days after. And of course December is a key month. I see resistance at 1720 that may prove to be important.

And never forget how the metals markets were ruthlessly slammed down into the October expiration

Gold Has a Go to the Upside as Stocks Slump on Euro Fears - Flight From Fraud

"The desire of gold is not for gold. It is for the means of freedom and knowledge."

Ben Davies

Gold and silver diverged from US equities today as fresh jitters over the Euro bailout put a damper on stocks.

Keep the $45+ rally in context of the current trading range however as is shown below. It has not yet broken out.

If you are trading with Level II market view in something like the miners

Gold Daily and Silver Weekly Charts - La Douleur

Markets were cheered by a better than expected economic activity report from China and good earnings from CAT. Europe was forgotten for the day.

Gold and Silver had decent gains as the dollar slumped.

The trend is not clear here and the breakouts are still pending.

SP 500 and NDX Futures Daily Charts

Big up day but on light volumes.

CAT earnings provided the domestic push, and better than expected data from China cooled fears of global recession.

The punters were whistling pass the graveyard on Euro debt today.

Let's see if they can break stocks out from here and make it stick ahead of the European meeting on Wednesday.

NFLX guided lower and was punished after the bell.

Gold Daily and Silver Weekly Charts - La Douleur Plunges to New Post War Low in Yen

It was 'Risk On' today as stocks rallied and went out on their highs and gold followed.

The US Dollar dropped to a post WW II low against the Yen on talk of QE3. I suspect strongly that someone in Treasury shared some prospective monetary actions with their Asian counterparts today. Apparently they are not so sanguine about the benign affects of modern monetary theory, even of the more benign

SP 500 and NDX Futures Daily Charts - Risk On, VIX Down, Hopes for QE3

Wax on and Wax off for option expiration.

The Risk Trade was On today on words from the Fed's Yellen amongst others hinting at a new round of QE3 from the Fed. Expectations are high that Europe will bail out its banks via the PIGS sovereign debts, in the manner that the US bailed out the Wall Street banks both directly, and indirectly via AIG.

If you have Level II trading you may notice that

Nassim Taleb on the Moral Hazard and Broken Economic Structure of the Western Crony Capitalists

I have had this link up, but I wanted to feature it here because so many have missed it, or missed the key message which is that the economic system is broken and that there can be no sustained recovery unless this is repaired.

When even so-called liberal economists decried the resistance to TARP, and categorized concerns about moral hazard as a kind of economic Puritanism, I knew things were

US Dollar Plunges to Post WW II Low Against the Japanese Yen

Bloomberg attributes the plunge of the Dollar against the Yen to concerns that the Fed will soon engage in QE3.

Some of the plunge was obviously technical, as sellers ran the stops and forced further selling. The currency market makes the stock market look good at the extremes of moves.

I suspect strongly that the Fed is much more involved in the European bailout than meets the eye.   And

Gold Daily and Silver Weekly Charts - Risk Off on Euro, Metals Hit As Usual

It was a 'risk off' day as euro jitters provided an excuse for a bear raid on metals, and weakness in stocks, particularly the tech sector.

The US Dollar Failed to rally, which all other things considered is remarkable.

Tomorrow is a stock option expiration day.

This is a difficult market. Be very careful if you must trade.









"Keep An Eye Out For Predators"

From light and

SP 500 and NDX Futures Daily Charts - Risk Off On Euro Concerns

Tomorrow is stock option expiration.

The US celebrated the lynching of Gadhafi.

Philly Fed came in much better than expected.

Microsoft met expectations after the bell.

Euro debt concerns are the 'Big Tickle.'

Scorn in the USA - #OWS As Viewed By the Pampered Princes of the Beltway

Gold Daily and Silver Weekly Charts - Risk Off - Maneuvering Ahead of Position Limits

Short term trend remains intact.

This is a stock option expiration week.

Equity volumes remain very thin.

SP 500 and NDX Futures Daily Charts - Risk Off - Option Expiration Week

Wax on, wax off.

As a reminder, this is a stock options expiration week.



The Real Class Warfare

Woodrow Wilson and Barack Obama

In looking for analogues to the record of Barack Obama as President, many look to Hoover. But I think Woodrow Wilson offers some interesting comparisons.

Here is an exerpt from the collection of Wilson's campaign speeches from the election of 1912 in his book, The New Freedom. Compare this alternative he offers to Theodore Roosevelt's Progressive Party with his actual performance once in

This Is the Gold Bull Market

Here is something from my 'private stock.'

This is the picture of a quiet flight to quality.

If you must trade, buy strength and sell weakness, and not the other way around when driven by greed and fear.

But for almost everyone, it is better to see the trend and ride its crest, perhaps hedging a little at the extremes, while the fundamentals that created it are intact.

What are the

Gold Daily and Silver Weekly Charts - Metals Hit By Bear Raid Then Recover On Rumored Euro Deal

If you had a calm trading day today then you probably were not trading.

Gold and silver were smacked down fairly hard in a two step operation around the NY open this morning in a blatantly obvious bear raid. Stocks also sold off quite sharply.

But then the markets started to recover, if one knows what to look for. I responded by taking down my short stock positions, and added substantially to

SP 500 and NDX Futures Daily Charts - Reports of Euro Bailout - Apple Misses!

This is the news report that rallied US stocks this afternoon.

And we might suspect that this is the root cause for the major bear raid on gold that occurred earlier today.

The Guardian UK
France and Germany Agree to €2 Trillion Euro Rescue Fund
By David Gow in Brussels

France and Germany have reached agreement to boost the eurozone's rescue fund to €2tn (£1.75tn) as part of a "

Net Asset Value of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts

'Cap and trade' is already here in the metals markets, at least during the London-NY trading day.

They cap the rallies and then trade the market down, in a sweeping manner to churn and burn.

I came into today long bullion and short broad stocks, with a little bit of a heavier foot on the short side, so it 'worked.' I did lighten up a bit but still went into the close with the same paired

SP 500 and NDX Futures Daily Charts - Hard Time Killing Floor Blues - VIX Up

A down day but not so much as a whisper of panic in the markets, more like the sound of a wash and rinse, as prices stayed carefully within their trading channels.

Earnings are coming in somewhat mixed, with the financials looking to accounting tricks to soften the blow of their downsizing from prior bloated levels.

VIX was elevated a bit, and we may have another leg down ahead of us.

The

Weekend Reading

Two Presidential addresses to the country on prior occasions of national crisis, division, and turmoil.

"...On the occasion corresponding to this four years ago all thoughts were anxiously directed to an impending civil war. All dreaded it, all sought to avert it. While the inaugural address was being delivered from this place, devoted altogether to saving the Union without war, insurgent

Weekend - Down Home

"So, you can laugh at or disparage the demonstrators all you want. You can call them spoiled, silly or sophomoric. You can single out the fringe and think it’s representative of the whole. But that won’t change the fact that this demonstration has touched a nerve. A rag-tag group is standing up where the government, regulators, media and business elites have rolled-over and played dead. They are

Gold Daily and Silver Weekly Charts - La Douleur du Monde

Stephen Leeb: Gold, China's Long Game, Currency and Resource Wars (audio)

SP 500 and NDX Futures Daily Charts

"Tricks and treachery are the practice of fools, that don't have brains enough to be honest."

Benjamin Franklin

This is about as far as it goes before breaking out, and the volumes had better pick up because they are too thin to sustain a new bull leg just yet.

The G20 are meeting over the weekend and expectations for a comprehensive solution to the European debt crisis are high.

More of

Gold Daily and Silver Weekly Charts

Capping the metals all day, but they could not make it stick.

SP 500 and NDX Futures Daily Charts - JPM Posts Weak Results, Boosted by Trading and Accounting

While the SP and broad indices slumped today on JPM's weak numbers, which pulled down the financials, the NDX never really gave it up all day, no doubt in anticipation of Google's numbers which were released after the bell.

Who needs money when you have Google Plus and ad clicks?




Jamie Dimon speaks to Blythe and her traders to rally the troops after posting lackluster third quarter results

What Is the Message From #OccupyWallStreet?

The next time someone asks that question, send them a link to this.



The Banks must be restrained, and the financial system reformed, with balance restored between Corporations and the people, before there can be any sustained recovery.

Gold Daily And Silver Weekly Charts - La Douleur du Monde

It was 'risk on' as money came out of the dollar and went back into equities and the metals.

The Fed begins its Operation Twist bond purchases tomorrow or so I hear.

Its all about Europe sovereign debt at the moment.

Gold is running on the inflation rails now and not on the risk adversity safe haven trade. That may change but for now it is what it is.

SP 500 and NDX Futures Daily Charts

Thin volume 'risk on' rally as stocks faded into the close from the highs but kept some gains.

The markets are primarily eyeing the sovereign debt situation and discounting domestic results and economy, at least for now.

SP Dec Futures Intraday - Operation Twist Begins

Although this could break out and keep going, I have held the thought that this is just a short squeeze within the context of a broad trading range from 1100 to 1220. It should be noted that the futures tend to be a little 'sloppy.' These moves up and down in a broad channel are what is known as a 'wash and rinse' or 'wax on, wax off.'

There is a potential triple top at 1215.

If the futures

Gold Daily and Silver Weekly Charts

Gold was strong overnight but was stepped on quite hard about 9 AM London time as is often the case. The east buys and the west sells.

Nothing has broken out yet. So we wait a bit and bide our time.

I am running some moderate gold bullion and a light silver addition on the ability to hold 32. A small hedge short broad stocks goes with it. No miners yet in the portfolio.

SP 500 and NDX Futures Daily Charts - US 3Q Earnings Season Begins Today

The US kicks off third quarter earnings season after the bell as Alcoa reports.

The markets remain thinly traded and headline driven.

Net Asset Value of Certain Precious Metal Trusts and Funds

Adjusted Monetary Base Less Excess Bank Reserves

Thanks to my friend Gary at NowandFutures.com for this chart.

I like to think of the expansion of the monetary base as it has been implemented this time, versus 1933 , as a large animal passing through the body of a python.

Who knows what might come out after the banks are done digesting it.

In the second version of the chart below I have merely added a simple trendline.

Absent lending and

Gold Daily and Silver Weekly Charts - La Douleur du Monde - Dec Gold Futures

Silver and especially gold had nice rallies today as it was 'risk on' with Sarkozy and Merkel crooning a lullaby to the equity markets. The dollar retreated sharply from its zenith. It has not yet broken uptrend.

I wonder if the metals liquidation is over, and if the hands that remain are strong and relatively unleveraged. We will not know until the stock market corrects again and we see

SP 500 and NDX Futures Daily Charts

A big rally on Wall Street today as the bond market was closed for Columbus Day. In other words the adults stayed home. So stocks had their way on hopes that Merkel and Sarkozy would come up with a feasible plan to take the French and German bank debts on to the public balance sheets, or at least whichever part is not served up as a haircut to bondholders and bank shareholders.

The US is

Missteps to Mayhem: Inside the Financial Mayhem Machine and the Policy Stalemate Today

I think this is an important essay from Michael Burry, excerpted below, about the financial crisis, and so I share some extended excerpts with a link to the original. Keep in mind that this is one perspective from a particular point of view.

For a more comprehensive and balanced view of the causes and progress of the financial crisis I highly recommend Econned, by Yves Smith. I have given

Modern Economics: The Money Masters and Modern Economic Theory - Credibility Trap

Yesterday it was Yves Smith who took Paul Krugman to task. And I defended him in that instance in the comments. But now alas it's my turn, and I don't take this up lightly.  So I must think it is important.

And I do.  Because a false premise is being used to justify a false conclusion and by extension a matter of serious public policy in an ongoing debate. And people are in the streets about

Gold Daily and Silver Weekly Charts - Anglo-American Bullion Banking Cartel at Risk

"Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province...Pan Asian will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will simply be able to use their Renminbi, the Chinese currency, from their bank accounts

SP 500 and NDX Futures Daily Charts - Plus ça change...

The markets were under three primary influences today.

An FDIC memorandum concerning the details of the Volcker Rule which will be voted on next week was leaked, and it has some strong prohibitions about insured banks engaging in proprietary trading. The bank lobbyists were on full alert, and the politicos will be buzzing in the Capital this weekend. Try the steak and lobster at The Palm

The Seduction of Science in the Service of Power: An Essay on the State of Economics

"Tyranny is always better organized than freedom."

Charles Peguy
This essay by John Kay excerpted below is a very nice summary of the problem we have in modern economics. It is a bit dry to the layman, but it touches on the distortions that crept in to economic thought and their intellectual sources and in particular the operational rather than political means.

I do not think it was

The US September Non-Farm Payrolls Report in Pictures

A remarkably 'clean' report with the only anomalies being a lower than normal Birth-Death imaginary jobs adjustment from the BLS, which subtracted 43,000 jobs, and a seasonality adjustment that appeared a little on the high side.

An exogenous factor was the addition of 45,000 striking telecommunication workers who returned to their jobs. So the organic jobs growth was weak.

"Nonfarm payroll

Jon Stewart: Mainstream Media Coverage of 'Occupy Wall Street'

The next two years will be a bonanza for satirists.

I have concluded from my reading of history that the greatest periods of change, the turning points, are best marked by and most notable for the remarkable inability, and sometimes tragic failure, of contemporary observers to understand them.

They do not see their causes, and fail to mark their progress and direction, in the time at which

Gold Daily and Silver Weekly Charts

"When nothing seems to help, I go and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that blow that did it, but all that had gone before."

Jacob Riis
Gold had another up day with stocks, as it was 'risk on' with renewed hopes for fresh infusions of

SP 500 and NDX Futures Daily Charts - Third Up Day in a Row

"Heroes are not giant statues framed against a red sky. They are people who say: This is my community, and it is my responsibility to make it better. Interweave all these communities and you really have an America that is back on its feet again. I really think we are gonna have to reassess what constitutes a 'hero.'"

Studs Terkel

Big up day, third in a row, ahead of the Non Farm

Time for a Financial Transaction Tax Designed to Fund Financial Industry Regulation

I would like to see a flat financial transaction tax enacted, applicable to any exchange. The tax would be $1 (or £1 or €1 or ¥100 for example) for any trade on any exchange public or private, for any registered security including derivatives, without regard to the size of the trade. I would even consider a lesser amount, say $.25 for example, based on better tax revenue estimates.

The real

Net Asset Value of Certain Precious Metal Trusts and Funds

A nice bounce in the metals with gold up to key resistance.

The trusts and funds are responding as well as the mining companies, ahead of tomorrow's important September Non-Farm Payrolls report.

One notable variant in this is the unusually large premium being given to the Central Gold Trust. This is almost certainly due to a short squeeze as it is one of the least 'liquid' of the closed end

Steve Jobs, February 24, 1955 – October 5, 2011

"...the unforgiven
Fire which Prometheus filch'd for us from heaven."

Lord Byron, Don Juan, Canto I.
"So we went to Atari and said, 'Hey, we've got this amazing thing, even built with some of your parts, and what do you think about funding us? Or we'll give it to you. We just want to do it. Pay our salary, we'll come work for you.' And they said, 'No.' So then we went to Hewlett-Packard, and

Gold Daily and Silver Weekly Charts - Currency Wars - The European Overhang - YE $2,000?

"The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro.

Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency.

SP 500 and NDX Futures Daily Charts - Headlines and Emotions

Greece is going to default, one way or the other.

The real question is how they will package it, and how big the haircut will be to the debt holders, anywhere from 21 to 50 percent.

Europe is running 'stress tests' again on the banks, obviously to see how they will fare against a range of scenarios.

I think they might buy the news if the haircut is below 50 percent and no banks are taken

Currency Wars: European Debt Crisis and the Next Phase of Global Finance

"The wealthy, not only by private fraud but also by common laws, do every day pluck and snatch away from the people some part of their daily living. Therefore, when I consider and weigh in my mind these commonwealths which nowadays do flourish, I perceive nothing but a certain conspiracy of rich men in procuring their own commodities under the name and authority of the commonwealth.

They

Gold Daily and Silver Weekly Charts - Flight to Safety, at Least for Today

Bounce today on a flight to safety, a concept that is still valid except during option expiration periods and panic liquidations perhaps.

There is a growing difference between the physical market and the paper markets. At some point they will converge.

"So the Western central banks got together, leased out some gold and the bullion banks sold the gold. The central bank gold being unloaded

SP 500 and NDX Futures Daily Charts - Going Out On the Lows

Downside on the stocks which went out on their lows, led by the financial stocks based on fears of contagion from a Greek default.

Currency Wars: Restricting Gold and Silver Sales in France

A few people have asked me about the recent story concerning France banning cash sales of gold and silver. The story originated here but was picked up by quite a few other sites last week. I was waiting to get some additional information before I posted it as well.

This is different from the reports of limits specifically on gold and silver sales in Austria.
"According to the bank

An Important Addition and Clarification to the OCC Report Discussion

As I wanted to look into the gold and silver situation, and the concentrations there amongst the Anglo-Americans I left out an important fact about derivatives in general.

The US OCC report does include not only commercial banks and trusts with US subsidiaries, but also "Bank Holding Companies."

The bank holding company report, while shown at a high level, is not included in the breakdowns of

Gold Daily and Silver Weekly Charts

There is intraday commentary on the derivatives markets with an emphasis on the Anglo-American dominance of the precious metals derivatives markets.

Gold caught a little bounce this afternoon and even closed rising despite a stronger dollar and a weak stock performance. But given the technical damage in the chart it was not significant.

It remains oversold and in a trading range as indicated

SP 500 and NDX Futures Daily Charts - Down to the Bottom of the River

Not a strong close for the month to say the least.

Traders were not interested in hold long positions over the weekend.

See you on Monday.

The Anglo-American Precious Metals Derivatives Duopoly: Quarterly OCC Report

The US Office of the Currency Comptroller (OCC) issues a Quarterly Report on the Derivatives exposure of US Banks and Trust. The report, including historical archives, can be found here.

The report includes "all insured U.S. commercial banks and trust companies as well as other published financial data." So obviously it is not comprehensive of private funds, and banks without a US subsidiary

Gold Daily and Silver Weekly Charts

The markets are waiting for some catalyst, some reason for their next move.

Until then they just churn back and forth.

SP 500 and NDX Futures Daily Charts

Stocks are still weak, and in a trading range, looking for some impetus to their next big move, up or down.

Die Mackie Messers Der Wall Street - The Mack the Knives of Wall Street

Ubi sunt qui ante nos fuerunt?
I was watching old movies and documentaries last night as a follow up to my recent readings. They also have some contemporary and artistic resonance to today.

Here is a clip that I found interesting. You may be familiar with the music if not the lyrics.

Drei Groschen Oper - Die Moritat von Mackie Messer



The above is a scene from the G. W. Pabst movie version

Gold Daily and Silver Weekly Charts

The metals reversed lower today as fresh selling hit the markets along with selling in the equities.

Jitters about the German vote and European debt situation were blamed.

See today's stock charts posting for commentary.

My view of the metals action is skeptical if not downright cynical.  I assumed we would have a down day in the metals to knock out any brave souls whose call options went

SP 500 and NDX Futures Daily Charts - "Sell Rosh Hashanah and Buy Yom Kippur"

The old Wall Street adage says:
"Sell on Rosh Hashanah and Buy on Yom Kippur."
Rosh Hoshanah begins at sundown on Wednesday, 28 September this year, and Yom Kippur at sundown on Friday, 8 October.

And the selling did come in today as stocks turned lower after a stronger open.

We are into the end of the month tape-painting period, and barring any fresh negative developments from Europe we *

Gold Daily and Silver Weekly Charts - Happy Option Expiration Day - Gold Carry Trade

Today was Option Expiration Day for the metals on Comex. Presumably the call holders have been beaten sufficiently, and now it is the turn of those holding puts.

This is a nice bounce, but as a caution the downtrends in the short term have not yet been broken.

In an earlier piece today about the gold market we discussed leasing of gold by central banks into the markets which certainly does

SP 500 and NDX Futures Daily Charts

We get the third estimate of US Second Quarter GDP on Thursday but otherwise the domestic news is light, and US markets are being dominated by sovereign debt concerns in Europe.

Gold Seasonality and a Convergence of Events at the End of November 2011

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded.

The US Fed was very active in

Thank You for the Pleasant Surprise

My friend Dominique on the Côte d'Azur‎ sent this to me, and it took me a little while to figure out why. So many things are going on.

I am stunned, surprised by joy.   Thank you for your patronage.

Et merci à tous mes amis du café.


This is from The Big Picture by Barry Ritholtz. I assume he was too much the gentleman to allow his own blog to be included in the voting. It would certainly

Gold Daily and Silver Weekly Charts - Night Bombing Raid - Silver +4.50 from Low - LBMA

Gold December futures fell to 1535 and Silver to 26.15 in the overnight session as a determined night bombing raid took them down in the least liquid period of the 24 hour trading day, with the low being reached around 2 AM New York time.

Silver Dec futures are now at 30.78 in New York, virtually unchanged from their open at 30.85, or up over $4.50 from the low.

Gold is at 1623 now, or up

SP 500 and NDX Futures Daily Charts - Big Reversal In US Equities - Dead Cat Bounce?

US stocks bounced hard today from a deeply oversold short term position.

However, the proximity to support in a somewhat cynical trading range is notable.

If it breaks out of that channel, either direction for more than a day, stay out of the way unless you are riding the trend.

The Golden Bowl - Long Term Update - Intermediate Correction - Target 2360 'To the Rim'

A friend from Strasbourg had sent me a long term gold chart, with the past prices updated for inflation, which I had termed, The Golden Bowl.

He has been kind enough to send the updated prices to it. The past prices are adjusted for inflation, but the current prices are nominal, and of course everything is priced in US dollars.

I should note that all the annotations are mine, so if it is

The Garden of Beasts: Die Nacht der Langen Messer - The Night of the Long Knives

I have finished reading The Garden of Beasts by Erik Larson, and I now understand why it is such a popular book of non-fiction.

It is remarkably well-researched, with an impressive set of footnotes based on original sources from diverse places. They are worth reading in themselves as they contain little delights and vignettes. The book provides deep insight into some of the minds of

Year-To-Date Performance of Various Financial Assets

Check out the Treasuries in the second chart, particularly the 30 Year Bond.

If the Fed had not been targeting assets to create some of these price moves it would be the best case for deflation which I have seen thus far.

I think this might be a case in which Fed does something with the right hand, which the audience is watching, while it does something very different with its left hand,

Gold Daily and Silver Weekly Charts - Liquidation Panic - Martian Gold - Comex Hikes Margins

"Yesterday, the textbook was thrown out the window. All asset classes saw sudden and sharp moves far in excess of normal volatility patterns. To an old timer, that points to one conclusion. Liquidation. Wide-spread liquidation across asset classes. Currencies, bonds, commodities and stocks all moved swiftly and sharply in a direction that screamed - Seek safety! Raise cash! Get liquid...

All

SP 500 and NDX Futures Daily Charts - US Equities Pause In Hopes of Intervention

US equities paused their selling and found some support today.

Next week is another story. The markets are looking for some official response on the European debt situation.

There is also concern about political discontinuity in Washington, and it appears to be well-founded.

Net Asset Value of Certain Precious Metal Trusts and Funds

Although it is slightly less visible to those who only look at US equity markets, there is a liquidation sell off in the world markets especially Europe. This is helping to steepen the correction in the metals markets.

Notice from this chart that the gold/silver ratio is back over 50 again. And so I have become interested in silver again today for my short term interests.

It is important to

Gold Daily and Silver Weekly Charts - La Douleur du Monde - Sexy Sadie Masters

Big Sell Off today in US markets as cash was being raised over renewed fears of a Euro-meltdown and a US recession.

The long gold - short stocks trade provided balance into this correction, but as of today the stock shorts are gone.

Let's see if the short term trends have bottomed. Unless this is the big one Elizabeth, I think they just might be.

If you are not in it, wait for it. But it