Gene Arensberg of the Got Gold Report says that the COT data “suggests that dips for gold and silver should be exceedingly well bid just ahead. Indeed, the structure of the COT is about as bullish as we have seen it for silver futures.” The supply demand fundamentals remain very sound with gold demand expected to exceed supply again this year, according to the World Gold Council who have said that gold has bottomed or close to bottoming. Gold will extend annual gains for a 12th year as bullion is “near” a bottom and demand will keep exceeding mine output, according to the World Gold Council. Mine production will grow 3% this year from last year’s 2,800 metric tons, while demand may be unchanged or slightly lower from a record 4,400 tons, said Marcus Grubb, managing director of the WGC in an Bloomberg interview in Tokyo. Mine supplies will remain in a deficit “for a foreseeable future,” Grubb said. Bullion is “near to the bottom at current prices, indicating gold will move back up again,” he said. Recycling has risen to make up for the gap between demand and mine output, he said. “Some of the drivers of the increase in demand are structured, central banks for example, the rise of Chinese demand and the wealth increase in Asia, including India and China as well as smaller economies,” he said. Central banks have increased gold purchases on concern about the dollar, the euro and the sovereign debts, Grubb said. The banks’ net purchases last year were the most since 1964. In 2010, they turned to a net buyer for the first time in 15 years.
Einhorn Eviscerates Buffet: "If You Wrap Up All $100 Bills In Circulation, It Would Form A Cube 74 Feet Per Side"Submitted by Tyler Durden on 05/30/2012 10:00 -0500
In Greenlight's latest letter we learn that "At quarter end, the largest disclosed long positions in the Partnerships were Apple, Arkema, General Motors, gold and Seagate Technology. The Partnerships had an average exposure of 98% long and 62% short." Also, we find a spirited defense of AAPL (if one which breaks no real new ground with the ever louder recent criticisms of the company), some thoughts on STX, a discussion on the Yen, some of the firm's profitable shorts, including DMND, GMCR, and JOE, but most delightful is this scathing attack on old crony capitalist, TBTF money bags himself...
Facebooking The Chinese Wall: A Step-By-Step Guide On How To Build An Unassailable Case Against Muppet Manipulators!!!Submitted by Reggie Middleton on 05/24/2012 11:12 -0500
For anyone who can't see the "WHY" or "HOW" in a Muppet Manipulators suit, re: Facebook IPO, here's a step by step guide comparing my research to that of the top 4 underwriters showing exactly what they did wrong & how everyone is ignoring it
- China Pledges More ‘Fine-Tuning’ in Support for Growth (Bloomberg)... more promises, just never any actual funding
- Spain Calls for Help to Lower Borrowing Rates (AP)
- China Is a Black Box of Misinformation (Bloomberg)
- Fed data expose US$100bn JP Morgan blunder (IFRE)
- EU Chiefs Clash on Bonds Amid Call Greece Keep Cutting (Bloomberg)
- Spain to Recapitalize Bankia in Latest Bailout (WSJ)
- The running schizo tally: EU urges Greece to stay in euro, plans for possible exit (Reuters)
- The Seeds of the EU’s Crisis Were Sown 60 Years Ago (Bloomberg)
- Fed's Bullard says orderly Greek exit possible (Reuters)
- Some Big Firms Got Facebook Warning (WSJ)
- Chesapeake Raises Big Bet in Ohio (WSJ)
In the Garden of Eden there is no scarcity. Food, clothing, and shelter in are abundance. Resources merely fall from the heavens upon command. It is economic paradise precisely because economics does not exist. The universal laws that hold in the world of scarce goods vanquish in the land of the plenty. The vision of Eden is the politician’s main source of employment. That is, promising to lead the suffering masses toward utopia by government decree makes for great electoral results. The voting fodder ignorant of economics falls in line to cast a ballot to grant themselves other people’s money. But of course many voters don’t see it this way. Their vision of the state is that of Eden. They see the bureaucrats and enforcers capable of tapping an infinite pot of wealth to pass along prosperity to those subservient enough to put them in office. This in turn has lead to the establishment of the welfare state and its plethora of entitlement programs. For those who see the modern day welfare state as corrosive to the productive capacity of any given country, no where is this theory more evident than the scheme of unemployment insurance.
According to some estimates, there are currently about 500 hedge funds in the world with AUM over $100 million. This means that roughly half of these asset managers collected performance and management fees for one simple task: to hold AAPL stock. According to the latest just released Hedge Fund Tracker from Goldman Sachs, a record high number of hedge funds, or 226, were long AAPL stock as of March 31, just days ahead of its all time highs, in what can only be described as the world's biggest hedge fund hotel (California). Because the only thing that is roughly comparable to the chart of the recently parabolic move higher in the AAPL stock is the number of hedge funds holders: 216 at the end of 2011, 209 at the end of Q3, 181 at the end of Q2, 173 at the end of Q1 2011, and so on. And while they may all be long the stock for their own "fundamental" reasons, the reality is that whenever there is a scramble for safety, on margin calls or simply due to general Risk Off behavior, it is the winners that would get sold, as selling beget selling, and eventually liquidations. Only in this case, 226 hedge funds all have the same winner. So far the AAPL drop has been relatively benign, not least of all because the stock is the NASDAQ, which just happens to be the growth frontrunning of the 2012 stock market. But what happens if the Fed continues to push off the NEW QE announcement: just how much of a general collateral redemption onslaught can the said hotel withstand before its tenants all scramble to leave at the very same time?
Minutes ago we reported that as the WSJ broke an hour ago, the Nasdaq has pronounced a retroactive mea culpa, claiming that had it known back then what it knows now, namely the plethora of technical glitches plaguing its systems, that it would have simply called the whose FaceBook IPO off. Yet we wonder: is the NASDAQ lying? The reason why we are suspicious that the exchange knew all too well just how badly it was overloaded, is the following stunning report from, who else, Nanex, which shows that for a period of 17 seconds, just around the time the FaceBook IPO launched for trade, all "quotes and trades from reporting exchange NASDAQ for all NYSE, AMEX, ARCA and Nasdaq listed stocks completely stopped." In other words: full radio silence. Or, as Nanex wonders, did "Nasdaq panic and reboot major systems to gain control over High Frequency Trading, just before the FB open of trading?" If so, not only was Nasdaq fully aware of the fully technical glitchiness of its systems, but it may well have precipitated even more confusion and more trading errors, resulting in the two hour trade confirm delays first reported on Zero Hedge, all in a mad dash and epic scramble to avoid reputational and monetary damage at the expense of investors.
They call their clients muppets, they lose their clients massive amounts of money, they get preferential government treatment and get paid billions in bonuses at the same time they accept trillions in bailout aid. Exactly why not a class actiion FB suit again?
- Hilsenrath: Fed Pondering Why Inflation and Deflation Threats Ebbed (WSJ)
- The Naivete: France to push for eurozone bonds (FT)
- The rebuke: Merkel Says She Won’t Shy From Clash With Hollande at EU Summit (Bloomberg)
- The Euro-love: Hollande's euro arguments "nonsense": Austria's Fekter (Reuters)
- Obama Campaign Does Damage Control After Dems Question Anti-Bain Strategy (ABC)
- Greece: four major banks recapitalized by Friday (L'Echo)... and if they aren't?
- China to fast-track infrastructure investments (Reuters)... because China needs more cement
- Jeeps Sell for $189,750 as China Demand Offsets Tariffs (Bloomberg)
- As Facebook’s Stock Struggles, Fingers Start Pointing (NYT)
- Facebook 11% Drop Means Morgan Stanley Gets Blame (Bloomberg)
From the BBC: "Facebook has started testing a system that lets users pay to highlight or promote posts. Facebook said the goal was to see if users were interested in paying to flag up their information." That’s their plan? That’s Zuckerberg’s big idea? Get users to pay to post premium content!? Did the well-circulated hoax that Facebook planned to get users to pay for use just turn out to be true? If they proceed with this (unlikely) it seems fairly obvious the world would say goodbye Facebook, hello free alternatives. The truth is that Facebook is a toy, a dreamworld, a figment of the imagination. Zuckerberg wanted to make the world a more connected place (and build a huge database of personal preferences), and he succeeded thanks to a huge slathering of venture capital. That’s an accomplishment, but it’s not a business. While the angel investors and college-dorm engineers will feel gratified at paper gains, it is becoming hard to ignore that there is no great profit engine under the venture. In fact, the big money coming into Facebook just seems to be money from new investors — they raised eighteen times as much in their flotation yesterday as they did in a whole year of advertising revenue. For an established company with such huge market penetration, they’re veering dangerously close to Bernie Madoff’s business model.
To all Dividend funds who bought AAPL on hope the Dividend would lead them to untold future riches and a perpetual stream of cash we have some bad news: since the March dividend announcement (of $2.65/qtr) you have already forfeited 5.66 years of dividend payments in the form of capital losses. Because what so many forget is that stock dividends also have another side: capital gains. Or in this case losses.
Out of money and in the red, but with revenue projections out the wazoo
Sometime around March 31 the market was soaring, and there were still those naive, clueless ones, who thought that 2012 would not be a carbon copy of 2011. Rumors of more QE were becoming quieter and quieter as the S&P was on a rampage, the economy was humming along (courtesy of the reacord warm winter as ZH predicted in January, but this would not be widely accepted for at least 2-3 more weeks), Europe was "fixed" and the world was a lovely place. It is right there that everyone's favorite "baller to the waller" David Tepper went all in and bought anything that moves, or doesn't, in financials and tech. As the chart below shows, after having a mere $764 million in equity AUM at the end of December 31, Appaloosa went on an epic liftathon, and increased its AUM to a whopping $4.1 billion in the span of 3 months.