Things are getting worse, not better. There will be more mass murders and horrific acts of violence, and they will not be fueled by guns but by the untreated mental illness produced by the stress of economic and social collapse.
The financial press is far behind in what the public would like or needs as evidenced by the outflow of money from equities and equity funds and into bonds and bond funds. The financial TV press is still fixated on stocks, addressing day traders that are a much smaller group of people than in times past and many shows treat investments as if they were some kind of casino enterprise. In other words, there is a lot of coverage that is directed towards speculators and not nearly enough directed toward investors. The bond markets are multiples of the size of the equity markets and coverage here is close to nil as retail and institutions alike concentrate much more on investing in bonds rather than putting their core money in equities. There is an old saying on Wall Street that to be successful one must “follow the money” and it is quite statistically evident that the money has flowed into fixed-income investments and that the financial press has not followed it. The investment world has changed and we encourage the media to grasp it and to change as a result.
Lately various media outlets have been swamped with stories and allegations of precious metal manipulation ranging from the arcane, to the bizarre to the outright ridiculous. At issue is not that these claims of price fraud are unfounded - they very well may be completely true - but without a notarized facsimile of an actual trade ticket signed by Brian Sack, or his replacement Simon Potter, or any of the BIS traders confirming they are indeed selling gold on behalf of the Fed, BOE, ECB, SNB or BOJ simply to keep the price of the metal down, what such constant factless accusations (and no, sorry, a chart showing that the price of gold may go up or go down sharply indicates merely that and nothing about the underlying factors for such a move) do is to habituate the broader public to the real issues surrounding precious metal, and other asset class, manipulation. So instead of searching for circumstantial evidence which one can easily find everywhere, we decided to go straight to the source. To do that we go back to a post we wrote back in September of 2009, based on an internal previously confidential Fed document, which conveniently enough explains everything vis-a-vis gold manipulation and leaves nothing to speculation or misinterpretation. Zero Hedge presents the smoking gun that may provide responses to all the various open questions regarding the Fed's Modus Operandi in the gold arena which answer the core question - motive - courtesy of a declassified memorandum, written by none other than the then Fed Chairman, and addressed to the president of the United States.
As markets continue to yo-yo and commentators deliver mixed forecasts, investors are faced with some tough decisions and have a number of important questions that need answering. On a daily basis we are asked what’s happening with oil prices alongside questions on China’s slowdown, why global trade will collapse if Romney wins, why investors should get out of stocks, why the Eurozone is doomed, and why we need to get rid of fractional reserve lending. Answering these and more, Mike Shedlock's in-depth interview concludes: "The gold standard did one thing for sure. It limited trade imbalances. Once Nixon took the United States off the gold standard, the U.S. trade deficit soared (along with the exportation of manufacturing jobs). To fix the problems of the U.S. losing jobs to China, to South Korea, to India, and other places, we need to put a gold standard back in place, not enact tariffs."
As everyone is staring off into the distance and admiring the sunset we advise you to turn your head towards what may be truly important and that is our old friend Greece.
Greek political leader, "We agreed on one thing - that we disagree on everything. The Troika men came to Greece as doctors and prescribed the medicine that would save the Greek economy and people; but in the end they proved to be charlatans."
Uncle Scrooge. “Them that’s got the gold makes the rules”
We submit that Draghi can say what he likes. He may wave the flag in front of the gates of Hell filled with good intentions but it is not his call; will never be his call. It will always be the Bundesbank who will allow the monetary spigot to be opened or demand that it be closed.
Swiss FX reserves went up by 50% in Q2, about CHF127bn and are now close to 65% of Swiss GDP, a very large number. The assumption is that in the first instance almost all of the initial purchases were of EUR (to support the 1.20 peg). The question is how may of these euros were they able to get out of to limit the SNB’s exposure. As Citi's Steven Englander notes, the extent of diversification matters for EUR, CHF, GBP and small G10 currencies. The risk is that the SNB has been unable to diversify out of the euros they bought in Q2. If the EUR share runs above 55% or worse 60%, it would mean that the SNB has had to hang on to a large chunk of their euros. Investors will see greater risk of ultimate capital loss if the peg should break and greater risk of desperation selling of EUR down the road. We get the answer when the SNB publishes its first half results on July 31.
That the US government's activities as a share of GDP have gone from well under 10% at the beginning of the last century to over 40% today – and will go over 50% by the time Obamacare is fully implemented – makes it clear that this country is now operating on principles that run completely contrary to those that promote success and economic well-being. The consequence of continuing to operate on this model will be a steady decline in the quality of life for most Americans, while favoring a ruling elite that produces nothing… except more roadblocks.
A lot of desk chatter about this move in risk-assets - and the entire reversion to red on the day in EURUSD - as a WSJ report now circulating suggests that ECB members are not backing reported proposals by President Draghi. Specifically, the statement referenced is the following: "Many ECB Members Surprised By Draghi's Comments Suggesting New Bond Buys, Source Tells WSJ". The bottom line here is that Draghi most likely pulled a Mario Monti (and his hanger on Mariano Rajoy), and spoke up before pre-clearing with Buba's Weidmann. Draghi thinks that, like Monti with Merkel at the June 29 summit, he can bluff the Bundesbank into submission, and Germany will agree to monetization, especially if markets have risen enough where nothing out of the ECB next week leads to a market plunge (as the WSJ explains below). The problem is that as we patiently explained, Monti got absolutely no concessions our of Merkel, as was seen in the bond yields of Spain after the June 29 summit, which hit record wides a few weeks later. Expect the same this time around too: i.e., Germany will hardly cave in to the European beggars.
Facebook investors are about to get unliked...
How can such a small country blow through so much money?
Those who Benefited from Wall Street Fraud Must be Prosecuted … Including Rogue Government Officials who Aided and Abetted the Crimes
When the Lieborgate scandal broke out and the Bank of England trace became publicly known, some of the more conspiratorially inclined elements saw in this epic shakedown at the English central bank nothing but an opportunity for the world's dominant investment bank, Goldman Sachs, to capitalize on the scandal and the succession panic now that Paul Tucker is obviously out of succession rotation, and to appoint its own tentacles to the head of this most important central bank that is currently squid free. In fact, on July 3 we said:"now that the natural succession path at the BOE has been terminally derailed, it brings up those two other gentlemen already brought up previously as potential future heads of the BOE, both of whom just happened to work, or still do, at... Goldman Sachs: Canada's Mark Carney or Goldman's Jim O'Neil. Granted both have denied press speculation they will replace Mervyn King, but it's not like it would be the first time a banker lied to anyone now, would it (and makes one wonder if this whole affair was not merely orchestrated by the Squid from the get go... but no, that would be a 'conspiracy theory'.)" We wonder if this speculation can be upgraded from conspiracy theory to conspiracy fact, now that Bloomberg itself has written a major article discussing just this suddenly very likely outcome.
Why a new LIBOR based on Fed Funds (OIS) is determined by back door dealings between government sponsored failures (Fannie/Freddie) and a handful of compromised TBTF banks
It’s funny, I was worried about my Second Amendment rights just a moment ago, but now that the Council On Foreign Relations, a global governance think tank and inbred cesspool of despotic elitism, has explained the situation to me, I suddenly feel at ease… In preparation for the fast approaching UN summit on “international conventional arms trade” in New York, the CFR has published yet another disinformation piece skewing the facts and twisting reality to lull Americans into a state of apathy. Am I surprised that the CFR would rehash the talking points of the UN and declare uninhibited support for their worldwide gun grabbing bid? Of course not. The CFR and the UN are part and parcel of the same nefarious sea monster; each tentacle does its duty to rend sovereign ships asunder. However, such propaganda articles from establishment organizations do give us an opportunity to dissect and annihilate a host of lies and misdirections in one fell swoop. There may not be much sport in pulling apart the CFR’s poorly composed arguments, but, it has to be done…
In Defining Hypocrisy, Weill, Who Led Repeal Of Glass Steagall, Now Says Big Banks Should Be Broken UpSubmitted by Tyler Durden on 07/25/2012 08:18 -0400
Who is Sandy Weill? He is none other than a retired Citigroup Chairman, a former NY Fed Director, and a "philanthropist." He is also the man who lobbied for overturning of Glass Steagall in the last years of the 20th century, whose repeal permitted the merger of Travelers of Citibank, in the process creating Citigroup, the largest of the TBTF banks eventually bailed out by taxpayers. In his memoir Weill brags that he and Republican Senator Phil Gramm joked that it should have been called the Weill-Gramm-Leach-Bliley Act. Informally, some dubbed it “the Citigroup Authorization Act.” As The Nation explains, "Weill was instrumental in getting then-President Bill Clinton to sign off on the Republican-sponsored legislation that upended the sensible restraints on finance capital that had worked splendidly since the Great Depression." Of course, by overturning Glass Steagall the last hindrance to ushering in the TBTF juggernaut and the Greenspan Put, followed by the global Bernanke put, was removed, in the process making the terminal collapse of the US financial system inevitable. Why is Weill relevant? Because in a statement that simply redefines hypocrisy, the same individual had the temerity to appear on selloutvision, and tell his fawning CNBC hosts that it is "time to break up the big banks." That's right: the person who benefited the most of all from the repeal of Glass Steagall is now calling for its return.