Following the recent conviction of Bernard von NotHaus for his "domestic terrorism", "dollar counterfeiting" Liberty Dollar operation (for which he faces up to 25 years in jail and a $750,000 fine), the Feds are now scrambling to recover each and every ounce of physical silver available as part of the fallout. Today, for example, AP reports that Federal prosecutors tried to confiscate NotHaus' hoard of silver "Liberty Dollars" worth about $7 million. Whether or not this 181,000 ounces of "fungible" physical silver will be enough to satisfy Comex silver deliveries by Federal authorities (read a key tri-party repo clearer bank), remains to be seen.
Remember the massive surge to world GDP courtesy of the Japanese disaster spouted by every idiot on CNBC? Well, here we go:
- TOYOTA SAYS WILL HAVE TO SHUT DOWN N. AMERICAN FACTORIES
- TOYOTA SAYS SHUTDOWNS MAY AFFECT 25,000 WORKERS
This is massively bullish for horse buggies and Flintstonemobiles.
Here Comes The 4th Front For America's Nobel Peace Prize Winner: UN Attack Helicopter Fires On Pro-Gbagbo Military Base In Ivory CoastSubmitted by Tyler Durden on 04/04/2011 - 13:30
Update: Nobel Peace Prize winner for 2011, Nicolas Sarkozy, has just authorized the use of force in Ivory Coast.
They don't make Nobel peace war prizes like they used to anymore. The 4th war front for the president of peace Barack Obama, who just started his reelection campaign, is almost here. Naturally, don't expect any actual declaration of war. From Reuters:
- U.N. ATTACK HELICOPTER FIRES ON PRO-GBAGBO MILITARY BASE IN IVORY COAST'S ABIDJAN - TWO WITNESSES
More as we get a list of casualties, whom we expect will be more than just chocolate lovers worldwide. In the meantime, the black market for Blood Chocolate is percolating.
Remember how OPEC promised it would immediately expand its "millions" in barrels in "excess capacity" when Brent passes $120? We are expecting a PR from Saudi Arabia it promises to releases it gobs of strategic reserves any...... minute.....now.......now.........NOW damn it. And to all our European readers, we offer our condolences for $10/gallon gas. Take it up with the Chairsatan... oh wait, the San Fran Fed just issued a paper saying the Fed is not, repeat not, responsible for $121 Brent. And the San Fran Fed is always, repeat always, correct. Oh well, it's all that perfectly inelastic demand for gas at surging prices then. Sorry.
The Fed is in a bind. No matter which way it turns, utter failure is a risk. Putting more money into the system risks no less than the dollar itself. Stopping quantitative easing (QE) risks plunging the economy and financial system into another period of turbulent decline. It looks like they are going to choose the latter. In a recent report, I made the case that pressure was building on the Fed to end its QE 2 program in June, and that if it did, there would be an enormous rout in the stock, bond, and commodity markets. That analysis still stands.
Is that a tent in the cumulative volume chart of the SPY April 130 Puts or is some investor just happy to see the supposed end of QE2? Either way, no better time to hedge against a market collapse in the next 2 weeks than when the VIX is (as usual) dropping. Someone has purchased 249,420 lots, or a $12 MM bet the SPY will slide notably by the 15th.
The next decade will see the complete failure of conventional economics. Why is this so? If we take the very long view, we find that all of conventional economics developed in the era of ever-cheaper, ever-more abundant energy and the miraculous "low hanging fruit" productivity gains made possible by cheap energy and the tools of mass production and industrialization. Like a creature that was born in the morning and has only seen daylight, conventional economics has never experienced night and so it has no conception of darkness. This is true of classical, neo-classical, Marxist, Socialist, Keynesian, Neoliberal, "Capitalism with Chinese characteristics," etc. Not one of these ideological strands of conventional economics recognizes the limits on conventional "growth" as measured by GDP, increased production, etc. When the planet's population stood at 500 million, there were sufficient resources to enable a doubling to 1 billion. Then 1 billion tripled to 3 billion, which doubled to 6 billion. Now, the 600 million high-energy-consumption "middle class" of post-industrial economies is expanding four-fold to 2.4 billion. There simply isn't enough oil on the planet, in any remotely plausible scenario, for 600 million of China's 1.3 billion people to live on an American scale of oil consumption, not to mention 600 million of India's 1.2 billion, and so on for every developing economy.
Grotesque, meet tragicomic. In today's POMO the biggest CUSIP monetized was QB9, of which the Fed purchased $5.99 billion (of a total $8.03 billion). And here's the kicker: when we commented on last week's 7 Year auction we once again were rather prophetic: "Altogether a weak auction but it's not like the PDs would let it fail
especially not with QB9 becoming the next "flip back to the Fed" bond
for the PD community." And tadaa: today, the Fed bought back 50% (!) of the Primary Dealer take down ($12.115 billion) of last Wednesday's (yes that would be the QB9) auction. This is probably the fastest episode Flip That Bond on record. Anything else and the Fed would be monetizing bonds that had not yet settled.
Former CIA analyst Michael Scheuer appeared on CNN and told his lovely blonde and brunette anchors the truth about what is really happening. The hilarious Stepford Wives reaction and the unprecedented cognitive dissonance the ensues is worth the price of admission.
In what is either a delayed April Fool's report, or its latest exercise in rhetoric the IMF asks the humorous question: "An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?" The obvious answer is naturally the Fed. The unobvious answer, according to the IMF, is the impossible: a slashing all of USSA's entitlement benefits by a whopping 35% combined with a hike in all tax rates. From the IMF: "This paper updates existing measures of the U.S. fiscal gap to include federal laws up to and including the mid-December 2010 federal fiscal stimulus. It then applies the methodology of generational accounting to establish how the burden of adjustment required to attain fiscal sustainability is shared across generations. We find that the U.S. fiscal and generational imbalances are large under plausible parametric assumptions, and, while not much affected by the financial crisis, they have not improved much by the passing of the Final Healthcare Legislation. We find that, under our baseline scenario, a full elimination of the fiscal and generational imbalances would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent. A delay in the adjustment makes it more costly." Such drama: have these people really not heard of the Fed. What is rather shocking is that Larry Kotlikoff, who has made it all too clear the US is bankrupt, was used as a consultant: "We are extremely grateful to Lawrence Kotlikoff who acted as a consultant providing unique inspiration,
guidance and supervision." Are massively dissenting voices now credible sources of information? What next: Fed white paper citing Zero Hedge?
Another day, another potential NYSE Chinese fraud. Muddy Waters starts coverage on DGW with a Strong Sell and a $1.00 target price.
In an absolute stunner of an announcement Bank of Countrywide Lynch's top notch head of economoplagiarism follows in Jan Hatzius' coattails once again and lowers Q1 GDP. All of Wall Street will promptly follow as it always does.
Atlanta Fed's Lockhart is the first Fed talking head on the wires today advising the general public to, gasp, spend: "A less consumption-dependent economy will help rebalance the country's external accounts—the trade and current accounts. It's unlikely and even undesirable that there be a drastic shift away from consumption, so less American consumption will not fix the global imbalances.[sic]" In other words: 1) max out your credit card 2) .... 3) profit.
No Inflation? In 1996 Slick Willie Raised $42.5 Million In Campaign Receipts; In 2011 Obama Plans To Raise $1 BillionSubmitted by Tyler Durden on 04/04/2011 - 09:09
A curious factoid: back in 1996, Bill Clinton rasied a total of $42.5 million in campaign receipts. In 2011, Barack Obama is expected to raise up to $1 billion to run his reelection campaign. A nearly 25-fold increase. Ironically, the 15 year CAGR on the price for the presidency follows the price of silver almost tick for tick. Coincidence?
Literally moments ago, Barack Obama tweeted the announcement of the start of his 2012 campaign. In a surprise to nobody in particular, the president stated that he plans to file the necessary papers with the Federal Election Commission today in order to begin campaign fundraising, further tweeting: "While I stay focused on the job you elected me to do, the work of laying the foundation for our campaign must start today." Perhaps this finally means that the USD is due for a bounce as the concerted effort at destroying the US currency will be slightly delayed among all the takes for various campaign clips like the one below. As for his competition, a poll by Farleigh Dickinson university has the President outperforming most competitors except for Mike Huckabee, with whom he is locked in a dead heat: "The president steamrolls former Alaskan Gov. Sarah Palin by a 20-point margin, 54%-34%. The president also wins easily - 48%-34% - over the only major Republican to have formed an exploratory committee for the 2012 election, former Minnesota Gov. Tim Pawlenty. And the president handily beats the former Speaker of the House, Newt Gingrich, by 15 points, 52%-37%. The president runs even with former Arkansas Gov. Mike Huckabee 46%-46% and about even with former Massachusetts Gov. Mitt Romney, 44%-43%." Of course, what happens to Obama's reelection chances is directly proportional to just three factors: jobs, the price of gas, and the stock market. Alas, while the jobs number is improving courtesy of the continued exodus of disgusted former workers from the workforce, the latter two factors are now mutually exclusive, and any further gains in the RUT will necessarily come at the expense of further cuts in affordable transportation distance, and vice versa, which naturally leads us to the question of what Goldman will order its subordinate at the FRBNY Bill Dudley to do: as usual it all boils down to this: "To QE or not to QE. That is the question."