Love them or hate them, only the most self-deluded can claim that the NIA, and its predictions, have been incorrect so far in this monetary 'printing' cycle. Sure they may have an agenda, and yes, Gen Ben may one day pull his money (if he is willing to see the S&P plunge to 666 and well below, so not really), which would kill all commodities, and certainly gold, in their tracks, but focusing solely on their message will have spared many massive real (not nominal) losses as surging commodity prices dwarf the modest pick up in stocks. Today's note from the NIA, while unpleasant, looks at the disastrous long-term consequences of the Chairman's monetary policy, and concludes rightfully so, that absent a diametric shift, which after today's press meeting may well require a revolution as the creature appears to be well on its way to QE3, 4 and so on, what is happening in Egypt is a preview of what will happen in the US in a few short year. Furthermore, the NIA's prediction that rice is up, up and away is in line with what Zero Hedge has been claiming since October (link). Also as a reminder, and as David Tepper just confirmed today, the realization that Rubber is the third and last R-bubble is starting to percolate...
According to Charlie Gasparino, the intifada between Meredith Whitney and the rest of the world just got uglier. According to the former CNBCer, the one-time Citi scourge has been called in to testify before the House TARP committee and explain her less than favorable position on munis.
Earlier today we noted that the ICE was considering establishing size limits in [insert surging commodity here], in this particular case cotton. This has just been formalized as per the press release below, and explains why cotton is among the worst performing softs today. If gold continues refusing to play along with the script, look for the CME to do something comparable with gold and silver (for the third time) shortly. But never, and we repeat never, expect the Globex to do something crazy like hiking margin requirement on ES.... Ever.
I debated whether or not to write today. To be completely honest I feel as if I have said as much as I can and don’t want to start sounding like a broken record. That said, we have clearly entered the next stage in this tragic circus called the global monetary and financial system death spiral. The final stage comes when the system consumes itself as a result of its refusal to reform and we are there now. The fact that most people are completely unaware of it or have such strong “normalcy bias” they can’t see what is directly in front of their faces is immaterial. It is here, it is irreversible, and it will unleash a cyclone of chaos and confusion that will leave many literally suspended in disbelief as the entire false paradigm most of humanity has lived under for their entire existence is washed away forever. - Mike Krieger
Hosni Mubarak sure is learning from the best criminals in the world.... Fast. Well over two years after Hank Paulson told Congress that the world would end unless he was given unlimited power to give the banks however much money the needed, Egypt's despotic president has done exactly the same, and in an interview with ABC's Christiane Amanpour, "said he's fed up with being president and would like to leave office
now, but cannot, he says, for fear that the country would sink into
chaos." And there you have it: the same mutual assured destruction strategy used by bankster and by despotic tyrant alike. One wonders - is there really any difference between the two.
For all those who were wondering why someone just bought a massive 75,000 put spread block on JPM earlier, here's the reason. Just out from the NYT, disclosing a suit filed previously against JPM by Madoff trustee Irving Picard under seal: "Senior executives at JPMorgan Chase expressed serious doubts about the legitimacy of Bernard L. Madoff’s investment business more than 18 months before his Ponzi scheme collapsed but continued to do business with him, according to internal bank documents made public in a lawsuit unsealed on Thursday. The lawsuit against the bank was filed under seal on Dec. 2 by Irving H. Picard, the bankruptcy trustee gathering assets for Mr. Madoff’s victims. At that time, David J. Sheehan, the trustee’s lawyer, bluntly asserted that Mr. Madoff “would not have been able to commit this massive Ponzi scheme without this bank.” But with the case under seal, there was no way to gauge the documentation on which the trustee based his $6.4 billion in claims against the bank — until now."
The firm which exposed RINO for the fraud it is has released its latest Chinese scam target: China MediaExpress Holdings (Nasdaq:CCME)."Muddy Waters LLC has initiated coverage on China MediaExpress Holdings, Inc. (CCME) with a Strong Sell rating and an estimated value of $5.28."
Sorry, we can't take credit for "chairsatan" - that one has Bill Gross written on it all the way... What can we say: the man sure can be a genius, especially when he isn't buying government subsidized BAB bonds. And when subsidies no longer work out, coming up with creative epithets sure is a great way to let off steam. That said, watch the full Bernanke NPC Q&A at the link below.
The lies come hot and heavy:
- Initial claims for unemployment insurance have generally been trending
down, and indicators of job openings and firms' hiring plans have
- QE 'Effective at easing financial conditions'
- Recovery likely to be 'more rapid' in 2011 than 2010
- 'Overall inflation remains quite low'
- Recovery in consumer, business spending may be solid
- Economy seems to have strengthened in recent months
But here's the only one that matters:
- Unemployment, inflation likely to defy Fed mandate
Which mandate is that Genocide Ben: would that be the mandate to kill off half the world with your revolutionary policies before the Russell hits 36,000?
Perhaps those 2 days of December 1,800 gold call purchases we discussed yesterday indicated someone (not Doug Kass mind you), knew something...Gold has just surged by $20 in minutes. Unless Blythe can find a way to contain this, this could get very ugly, very fast.
And so the tide rising all commodities keeps coming: rough rice has just passed its December 2009 high and is now at its highest since October 2008. When we predicted on Monday morning that "rice is next", little did we think that it would be up by 11% in 4 days. And with this important resistance level broken, it is smooth sailing to the next two resistance levels of $20 and $24. Of course, Bangladesh will be in flames long before any of those are hit. But a speculator has to eat, right. After all, none of this is Gen Ben's fault.
The Criminal Reserve once again lives up to its name...
"Based on our research, China Agritech, Inc. (listed on NASDAQ as CAGC) is not a currently functioning business that is manufacturing products. Instead it is, in our view, simply a vehicle for transferring shareholder wealth from outside investors into the pockets of the founders and inside management. Our price target of $2 is based on the cash currently reported on CAGC’s books—$45.8 million—divided by the number of shares outstanding. The company’s remaining business does not, we believe, exceed $7.5 million in revenue per year. If the overhead associated with maintaining a listed company is taken into account, there is no profit. Since we believe China Agritech has no valuable technology, intellectual property, customer relationships, or capital assets, there is no value to the company other than dissolution value." LM Research
According to Al Jazeera, the Egyptian Central Bank has just imposed a withdrawal limit of $10,000 on all banks in order to prevent a systemic bank run that will promptly wipe out what is left of the financial system. Look for this number to be cut to $100 in the first several minutes after banks reopen (whenever that actually happens). As for all that central bank currency "gold backing", somehow we have a feeling that Egypt's 75.6 tonnes in gold is about to be drastically adjusted. Also, it is not too late to reevaluate that long EGPT thesis.