Fresh all time nominal high in spot gold: $1,427.01
Flash Dash In Silver Mini Contracts On Volume Surge Breaks $30 Stops, Takes Metal Firmly Above ResistanceSubmitted by Tyler Durden on 12/06/2010 - 16:35
As the chart below shows something just snapped in Mini Silver several minutes ago, which may have been the proverbial pseudo violent break of the JPM barrier. As the price briefly shot up to well over $30.60 on just under 150 contracts, leading to a $0.30 differential with the large silver contract, an arbitrage which may put the NYSE Liffe in hot water with quite a few clients. Will this third attempt to take out the key $30 barrier prove to be the decisive one?
Breaking news per Reuters: "Lawyer for WikiLeak's Julian Assange says arranging to meet police by consent." Whether this means an arrest is imminent we hope to find out shortly. And just this out from NBC: Julian Assange's attorney says a place and time are being negotiated for a meeting with Scotland Yard.
In this week's Straight Talk episode, Chris Martenon interviews Charles Hugh Smith, both very insightful individuals who have repeatedly appeared on the pages of Zero Hedge with unique and always original perspectives. Of all issues that dominate CHS' outlook on the economy, society and politics, the top two items that keep Smith up at night are "demographics and Peak Oil...which cannot be massaged away by policy tweaks or financial engineering." Much more in the enclosed interview.
Earlier today it was announced that in lieu of a physical arrest, Julian Assange is currently undergoing a liquidity one, after earlier today first Swiss NZZ and subsequently the WSJ reported that the Australian's funds in Swiss PostFinance bank have been frozen: "In a statement Monday, WikiLeaks said there was €31,000 in the PostFinance account, belonging to the defense fund and to Mr. Assange personally. WikiLeaks described this money as "frozen." But €31k may be a small price to pay knowing that very soon Assange will most likely succeed Ben Bernanke as the magazine's Person of the Year.
It is confirmed: last week's incursion by the ECB in buying any and all offered Irish and Portuguese bonds is now in the history books. As the ECB reports, "in the week from Monday 29 November to Friday 3 December were of a volume of EUR 1,965 million, the rounded settled amount - and the intended amount for absorption accordingly - increased to EUR 69 billion. The transactions made between Wednesday 1 December and Friday 3 December have, with few exceptions, not yet settled and hence are not reflected in this figure." In other words, the bulk of the peripheral bond buying is not even included, and we will share the final tally with readers next Sunday night. We fully expect the amount for the week ended December 13 to be another all time record. In the meantime, the chart below shows all of the recent purchases under the ECB's SMP (aka sterilized open market monetization) program. As an aside, the biggest amount monetized occurred in the first week of the program's launch when the ECB monetized €16.5 billion.
Now that Tim Geithner has put the bond issuance machinery on autopilot, and all future bond auctions will be eventually monetized by Bernanke (and then some: after all a fiscally united Europe is expected to start bond issuance soon), he has decided to branch out into the next best thing to destroying the once greatest country in the world - blogging. And, sure enough, that titanic scion of the blogging world, Barry Ritholtz takes some time away from his busy schedule which lately involves a daily stint on CNBC's Fast Money, to share some brilliant insights with Tim Geithner on how to create a killer blog. We present this without commentary, because after one reads such words, and what can one say but... Ritholtz.
Brian Sack Sneaks A Fast One: 20% Of Today's Long-End POMO Monetization Is 30 Year Auctioned Off Last MonthSubmitted by Tyler Durden on 12/06/2010 - 14:13
After in the last two POMOs Brian Sack put the most recently issued bond on the exclusion list, today, as part of today's micro $2.044 billion long-end (2028-2040) POMO, the PPT head tried to sneak a fast one, after the second most monetized issue ended up being the QL5 of 11/15/2040, which just happens to be the bond auctioned off less than a month ago (November 10). This amounts to 2.6% of the entire $16 billion auction. We are confident that before all is said and done, not only will the 35% SOMA limit be raised on this 30 year CUSIP, but the Fed will be the proud owner of well over half of any and all recently issued long-end bonds.
Two weeks ago, the New York Times's Gretchen Morgensen wrote an article in which she touched upon the curious case of Kemp vs. Countrywide Home Loans in which Countrywide held on to the original mortgage note and related docs "even though the pooling and servicing agreement
governing the mortgage pool that supposedly held the note required that
it be delivered to the trustee, the court document shows" thereby impairing the integrity and validity of all downstream securities. Prior to this (and since) we have seen many more cases in which there was outright court fraud in some capacity, either w/r/t the PSA or the already well known issue of robosigning. It is no surprise that after making a splash, this topic has disappeared from the mainstream media, as banks are doing all they can to "silence" the debate, whose implications could be terminal for the US leveraged housing paradigm, which has existed since the advent of the GSEs. Yet, surprisingly, in today's Weekly Credit Outlook, Moody's brings new attention to this particular case, and adds some language that if one were the CEO of Bank of America, one would be very, very nervous, more so than even how damaging the revelations from the Wikileaks disclosure on BofA may end up being. To wit: "We believe the case will lead to increased litigation, higher servicing costs, and more foreclosure delays. This will pressure BofA’s earnings. Increased foreclosure timelines and costs associated with potentially defective loans will also increase losses for Countrywide-sponsored RMBS. This is negative for both BofA and Countrywide-sponsored RMBS." Did Moody's (always horrendous at timing its entrance and exit) just pee in the proverbial RMBS pool?
I don’t know about you, but I’m not 100% sure about anything. The older I get, the less sure I am about everything. I question things that I was sure were true when I was 25 years old. I’m not sure I’ll wake up in the morning. I’m not sure I’ll survive my commute to work. That is why I was flabbergasted last night as I watched Scott Pelley interview Ben Bernanke on 60 Minutes. As a side note, boy this show has gone downhill. In the old days of real journalism, Mike Wallace would have scorched Ben Bernanke, pointing out his phenomenal ability to be wrong or clueless on every financial issue the country has faced in the last 10 years. Today, Pelley underhands softball questions to Bernanke and never challenges him. It was a pathetic display of journalism. Below is the dialogue that made me almost fall off my chair...
Irish Independent MP Lowry To Support 2011 Ireland Budget, Giving Budget Vote Majority Of Two In DáilSubmitted by Tyler Durden on 12/06/2010 - 12:48
Update: Second Independent Irish lawmaker Healy-Rae to back budget, essentially guaranteeing budget passage.
Reuters reports that the Irish Independent MP Lowry says he will support the 2011 budget. Presumably this means that the Irish budget tomorrow should pass, which is likely good news for the euro as it means the eurozone has bought itself a few more months of breathing room. Or not. Who cares anymore. At this point just one more independent vote is needed to pass the Irish budget vote.
Since it is now all too obvious that few if any Americans read (one wonders what the prospects for the Kindle really are), the one mitigating revelation is that cartoons (we recently called the Xtranormal bubble) and comedies are springing up like mushrooms, explaining all the fraud that occurs on Wall Street courtesy of tens if not hundreds of millions of unemployed Americans who suddenly have a lot of free time on their hands. The latest and greatest one takes on Jamie as Hitler (who has been very busy recently, having to deal with both MBS fraud and the Irish collapse) who we find is not too happy to learn that the Argentum line was just taken by the Asian banks and the millions of US coin purchasers, and the resultant squeeze is about to force his bank to come begging at the front door of the FRBNY for capital to fund the world's biggest collateral call ever.
As silver attempts to break $30/oz yet again after the LBMA woke up and rejected an earlier attempt to take out the critical barrier, it is appropriate to present the most recent interview with Eric Sprott (by the Globe and Mail): the man who one of few, and very much against the conventional wisdom grain, called the move in precious metals many years ago, and so far, has been spot on. The summary on why the much maligned PM bubble is not even close yet: "I think gold is the reserve currency today. There is not a currency in the world that it hasn’t appreciated against by at least 300 per cent. And it has beaten every stock market. You can’t even rent a safety deposit box in Germany because they are all full of gold and silver … I am pretty convinced that gold will go a lot higher because it is under-owned as only 1 per cent of people’s money is in it. It could go to $2,000 an ounce. I could imagine it at $5,000. I am not giving a time frame on that, but I could certainly see that happening. But the real story now is silver." And on silver: "Gold has traded at a ratio of 16-to-1 to silver in terms of price, but today it trades in the range of 50 to 1. I think the gold-to-silver ratio is going to go back to 16 to 1 given the passage of time, say three to five years. And I bet you that silver overshoots. The gold-to-silver ratio may even get down to 10 to 1. I believe that the price of silver has been suppressed."
The only thing less surprising than the knowledge that China is cooking its books, would be that the back office of the BLS is populated by a bunch of meth snorting, ecstasy crunching, dart (and occasionally feces) throwing, data manipulative simians. And while we have to wait for confirmation on the latter, it appears that among the thousands of Wikileaks disclosures is definitive proof that even China does not trust its own Department of Truth. The Telegraph reports that "China's economic figures are unreliable and not to be trusted, according to Li Keqiang, one of the country's most senior officials." And so we get yet more proof that the data behind the marginal bubble driving the global credit bubble to unprecedented stratospheric heights is complete garbage. But somehow the David Kostins of the world have the temerity to appear on CNBC, parade in their newly found Goldman Sachs partner status, and claim they know to the dot not only what will happen to a global economy, but where the S&P will close +/- 50 points....based on numbers which both far and near, are nothing but a complete and total fabrication.