Archive - Aug 15, 2013

The last time there were two aircraft carriers and one more more amphibious groups in the 5th Fleet Area of Responsibility (i.e., the Middle East), an Israeli invasion of Iran seemed imminent. This time, Iran is deeply on the backburner, however Egypt, Syria, Lebanon and others certainly are front and center. So how are key US naval assets positioned this time around? As the Stratfor graphic below shows, the US is currently fully prepared for any "surprises" that may happen in the immediate and not so immediate future.

It would seem the demand for physical gold and the apparent limit on paper-gold decompression (given recent musical chairs in COMEX and Gold ETF holdings rising) are hitting at an inopportune time for the confidence-inspiring central banks of the world... Seasonally (for 30 years), August has marked the cylical low.

Earlier today, while looking for a certain picture of president Obama, we used the Google Images function searching for Obama Golfing Pics. We had no idea what Pandora's box we were about to unleash...

Unlike the supposed reality that is being broadcast on mainstream media TV, today's volume is considerably above average. In fact, S&P 500 futures have traded 1.8 million contracts against a recent average of 1.125 million for this time of day. The S&P 500 has already traded its highest volume in 7 weeks (and there remains 90 minutes until the cash close). So - where is the low volume that CNBC seems to be seeing?

The housing market. It would be the done-thing normally to imagine that one might learn from mistakes that have been made in the past; and not only learn from them, but make sure that they don’t happen again.

Just in case the borderline civil war in Egypt isn't enough to inflame hostilities in the middle east region sufficiently so the US finally gets involved, the US-funded, Al-Qaeda backed Syrian rebels decided to launch a second escalation offensive, this time near the very headquarters of the pro-Damascus Shiite group Hezbollah when a powerful car bomb killed at least 14 people and wounded about 200 others, national news agency NNA said. AFP reports that a previously unknown group believed to be a Syrian rebel cell said it carried out the attack. The bombing, reminiscent of the frequent attacks during Lebanon's 1975-1990 civil war, caused enormous damage to buildings. Whether this provocation (US funded or not) will be sufficient to force a Lebanon escalation in the Syrian conflict is unknown, but there is only so much more that the region, already at its breaking point, can take.

Conventional Left-Right ideologies shed little light on the structural causes of inequality or systemic solutions to poverty.

The reason why gold just did an upward spike move of the type not seen since the summer of 2011, when it exploded higher by $20 in seconds, is clear - as we noted yesterday, JPM is now actively buying up gold in the market to meet delivery demands. That, and countless stops getting hit, helps. But the most important factor: Paulson, Soros et al finally got out of the yellow metal. That meant there is only upside as the latent selling overhand is gone. As for silver: why not...

Draghi is a clever man in charge of a pretend central bank (for it’s only equipped to fight inflation, not a banking-turned-sovereign-debt-and-unemployment crisis). He must guess that bond investors will soon figure out that a stateless central bank defending a stateless currency is so hamstrung politically that it carries far less firepower than, say, the Federal Reserve has over the US economy and US dollar. If his outright-monetary-transactions bluff collapses, he may well have other tricks ready to suppress yields on struggling sovereign debt and save the euro (without which there is no need for the ECB). If Draghi is out of surprises, he can be thanked for buying time for politicians to come up with durable solutions to the eurozone’s woes. Oh, that’s another flaw with Draghi’s scheme; it removed the pressure for politicians to act. So they haven’t.

NYT's thesis that Ackman's actions prove something is wrong with activism is specious. His actions prove only something is wrong with Ackman

— Carl Icahn (@Carl_C_Icahn) August 15, 2013

While the 'people of Wal-Mart' may reflect the people of America, we hope - based on the chart below - that the growth in Wal-Mart does not reflect the growth of America...

Not satisfied with raising import tariffs on gold and putting in place jarring new FX flow capital controls, it seems the war on a weakening Rupee continues. We previously discussed the unintended consequence of such actions - including the rise of the gold smuggler - but the latest total ban on the importation of gold coins and medallions is edging India closer and closer to the Argentinian edge of Cristina Fernandez totalitarianism (after the initial ban on sales in June). In an effort to "moderate outflows" of Rupee, the Indian central bank slashed the amount of money families can send out of the country per year to $75k (from $200k) and limited overseas investment to 100% of net worth (from 400%). "We will leave no stone unturned" to control the current account deficit and stabilize the rupee, the finance minister warned; which of course removes any hope that monetary easing to revive growth will occur anytime soon.

The American narrative is quickly changing. There has long been criminality and degeneracy within our government (Democrat and Republican) and the corporate cartels surrounding it, but what we are witnessing today is the final step in the metamorphosis that is totalitarianism. The last stage accelerates when the average citizen is not just complicit in the deeds of devils, but when he becomes a devil himself. When Americans froth and stomp in excitement for the carnival of death, and treat the truth as poison, then the transformation will be complete.

Those damn Egyptians are so inconsiderate: first they non-coup just when John Kerry is busy honing his sailing skills. Now, the non-coupy country breaks out in civil war just as Obama is on vacation in Martha's Vineyard. Well, Egypt may be important enough to serve as a middleman when the US pays Lockheed Martin using Egypt as a dumb intermediary, but is obviously not important enough for Obama to cancel his vacation. Moments ago in an audio-only presentation (couldn't russle enough Martha's Vineyardians for the podium behind him? Were his sleeves rolled up? Was he reading from paper or a teleprompter? The people demand to know), Obama joined Kerry in "strongly condemning" the violence that according to some has already spilled over into all out civil war.

Who woulda' thought? I know who...