30 November 2012

Gold Daily and Silver Weekly Charts - Oppan Gangnam Style


"Vanity is the quicksand of reason."

George Sand

Another bit of a bear raid in the metals took gold back down to touch the 30% retracement on the handle intraday.

Otherwise it was an uneventful day, as the true money believers placed another appendage in the dike of their illusions, and hoped for the best.

The word for the day is 'fatuous.' It means frivolous, silly and pointless.

Much of the financial market action in times of general fraudulence is fatuous, with genuine significance.

There is a faith based culture among the nation's financiers, as typified by Modern Monetary Theory, naturally efficient market theory, job creationism, free trade, and so forth.  It serves to show that a lack of faith in God is easily compensated for by an equally fervent faith in something else, like yourself.  Everyone believes in something.

And where the facts of the real economy are in conflict with such esoteric theories, a profane faith intensifies and rises to meet and exceed all objections.  After all, it is bound by no exterior restraints, being by its very nature willfully self-referential and manipulative.

And nothing chafes vanity more than hard reality, some recent post election behaviour being a case in point.

Any person is entitled to their own opinion, but not to their own facts and outcomes. So one may believe as they will, but will be held accountable by the numbers for their beliefs. At the end of the day, life is a school of probability.

See you Sunday evening.





Gangnam is an area of Seoul south of the Han River. It is an icon of the rapid economic development of South Korea, having benefited from skyrocketing real estate prices and planned economic development. Gangnam is where the elite live, and the well-to-do young people go to party. In the song, the rapper Psy describes the kind of guy he is and the kind of girl he wants, painting caricatures of the ostentatious culture of the people in Gangnam.
This Korean rap video went 'viral' and is on its way to a billion views on Youtube. It is a 'catchy tune,' and would likely be easy to dance to in the manner of techno music which swept the Manhattan party scene during the era of the 'club kids.'

But it is also emblematic of the age and the culture: self-absorbed, frivilous, extravagant, unproductive, and vain.


SP 500 and NDX Futures Daily Charts


Quite a nothing of a day. The big excitement was another round of histrionics from Representative Boehner with regard to the 'fiscal cliff.'

And there was the big driver of volume today, the MSCI rebalancing, which occurred at the close, as index managers scurried about chasing that other bit of nothingness.

Have a pleasant weekend.




29 November 2012

Gold Daily and Silver Weekly Charts - Silver, the WidowMaker


Silver would not be denied.

It is coiling so hard, they are going to be carrying traders out of the pits on stretchers when it moves.

Shout and feel it.






The Lockheed P-38 Lightning was called der Gabelschwanz-Teufel, 'the two tailed devil' by the Luftwaffe and 2飛行機、1パイロット Ni hikoki, ichi pairotto, 'two planes one pilot,' by the Japanese. It saw service throughout WWII, especially in the Pacific Theater.



SP 500 and NDX Futures Daily Charts - Free Money, Teen Spirit


Stocks had been largely higher on the day as GDP came in revised upwards from 2.0 to 2.7 percent growth. It was reassuring, especially if one did not look closely at the details.

Boehner came out later in the day, shaking the fiscal cliff shibboleth at the markets, causing them to dip quickly. One must presume that the Dems are playing hardball, as well they might.

In intraday commentary I speculate in passing that El Cliffo may be the wrapping paper for the next 'offer the people cannot refuse' from the Bankers and the mavens of privilege, in the manner of TARP.

I also, once again, outline the parameters for how hyperinflation might occur, and the latest in economic fairy tales being promulgated by the financiers and generation koolaid, money for nothing, and chicks for free.

The parade of pigmen between New York and Washington smells like teen spirit.  O brave new world, that has such people in it.

Have a pleasant evening.








Hyperinflation and the Pernicious Myth of Modern Monetary Theory: Dollar Vigilantes


"One might argue that when the government has to find a private sector buyer for its debt first, rather than selling the debt directly to the central bank, that imposes a certain degree of market discipline on fiscal policy. But it’s hard to see that there is all that much of a disciplinary bonus here.

When a central bank announces that it is prepared to buy government securities, the announcement automatically guarantees an eager private sector market for the securities – if there wasn’t one already. If dealers know that they can promptly re-sell newly purchased securities to the central bank, at some amount over the purchase price no matter how low, then they know they can make a profit from the purchase...

This is why we have no need to worry about those dreaded bond vigilantes in a country like the US that controls its own currency and monetary operations. To the extent that the Fed signals it is willing to buy US debt aggressively, the Treasury can set almost any price it wants for its debt. So it’s not just that there is no insolvency threat haunting US public debt. There is also not a bond vigilante attack threat – not unless the Fed allows that attack to occur."

New Economic Perspectives, Neoliberal Mythologies

The limit of the Fed’s ability to monetize sovereign debt is the value of the dollar and its acceptance, at value, for the exchange of goods in a non-compulsory environment.   And there is nothing neo-liberal about this. I don't like the neo-liberal approach, but this notion of pain-free monetization is nuts.

If one chooses to not worry so much about the ‘bond vigilantes,’ history suggest that they may well have a care for what I would call the ‘dollar vigilantes.’

The Fed may be hard pressed to buy dollars with — dollars.

The problem with such an approach is that one can ignore the risk for a time, trusting to probability and chance, but when the possible becomes more likely with repetition, it often results in a disaster. It is sort of like driving while texting, a tourist eating street food in Asia, or a small speculator being a non-insider customer at the Comex.

In a increasingly Machiavellian way, they could set up a reciprocity with another central bank or two, say, the BofE and BofJ, and perhaps even the ECB, and I think this has been done even if informally in the past.  

But the limitations are still there, even if hidden in a fog of financial engineering.   Such an arrangement, which I think exists somewhat informally today,  is merely kicking the can of currency failure down the road. 
"This is why we have no need to worry about those dreaded bond vigilantes in a country like the US that controls its own currency and monetary operations."
Overt monetization only works for a protracted period in a system in which one has political control over everyone who uses that currency. The logical outcome of a global dollar regime with unilateral monetization is an eventual bid for a one world government where a false vision of reality can be enforced with -- force. Force and fraud are the perennial instruments of economic tyranny. 

Hence we are in what is called 'the currency war' wherein the US dollar monetarists are attempting to increasingly impose their will on the rest of the world, and a portion of the rest of the world defers to accept that arrangement.

Blatant exposure is the most dreaded pitfall of any Ponzi scheme.  A fiat currency is based on faith and confidence, and the monetary magicians can hardly show their hand, directly monetizing debt without any independent restraint, for fear of provoking a panic, first at the fringes and then at the core of the nation, or empire.

That is the policy error that is also known as 'hyperinflation,' a break in confidence in a currency that is analogous to a 'run on the bank.'  It is the case for hyperinflation which I am watching, and still give a low probability.   I am fairly sure that even Zimbabwe Ben would not fall for such an obvious trap.  But the craven dissembling of Alan Greenspan was also hard to imagine, until it happened.

Instances of Hyperinflation from Diocletian to Bernanke

There are other ways to deal with unpayable debts than merely printing money.  A novel idea is to make the issuers and holders of the bonds bear the negative effects of their bad judgement, as in the case of Iceland.  But the Banks will always try to shift the burden, which they have created, to the financially illiterate and the weak.   

And the problem is not even so much the Fed's propensity to stimulation in the manner of Keynes.  The problem is that they are pouring the stimulus into an unreformed rathole of corruption, in the manner of sending aid to a country where it is intercepted by thieves and regional warlords, with little reaching the people.

The US does not have a spending problem so much as it has a 'corrupt financial system problem,' a 'wealth inequality problem with a stagnant wage base,' an 'unsustainable healthcare model problem,' and 'a free trade without adequate domestic policy based boundaries problem.'   It was not all that long ago that the US was holding a small annual surplus.  What changed was financial deregulation with the financialization of the economy, the easing of trade conditions, concentration of corporate power, tax cuts for the wealthiest, a corrupting political campaign bubble, and unfunded discretionary wars with their associated profiteering.

Forcing small business and workers to compete with state directed slave labor while maintaining a social system founded on private business and median worker wages is insane.  The capitalists are not yet selling them the rope, but they are certainly selling them the 97%, and with them the bulk of their customer demand over time.

Perhaps the biggest problem is, as Lord Acton observed, that when you have a concentration of power, men with the mentality of gangsters have taken control. And the US financial system and corporate structure are highly concentrated based on historical standards, resembling the worst of the gilded age of robber barons, or some third world oligarchy in which the people live in voiceless misery.

In summary, I call this 'just monetize the debt without restraint' alternative  the “pernicious myth of modern monetary theory.”   There are quite a few examples of how this sort of other worldly myth, like the efficient market hypothesis, the Black-Scholes risk model, and the benefits of unrestricted trade, have turned out in the past.  When you crush the reality out of a model with a few key assumptions that allow you to obtain a license to do what you will, you often open a Pandora's Box.

The real shame is that an economic tragedy is not outside the plans of some of the worst of the country's elite. Crisis provides opportunity if one is powerful enough, positioned for it, and egotistically twisted enough to think that they can control the madness once it is unleashed. I suggested that the Bankers would make the country another 'offer that they think it cannot refuse' as they did in the manner of TARP. The so called fiscal cliff may be the wrapping paper for it.

I am not suggesting that the current debt based currency system is optimal, not at all.  The continual theme here is that the financial system is broken, and that it is based on an unsustainable US dollar regime, and the excesses of money creation through credit expansion by private banks.  But to merely shift the corruption from the banks to their partners in the government Treasury is hardly a viable solution.

The answer, as I calculate it, is transparency and reform, and equal justice for all, with malice towards none, in the rule of law.   That is an ideal never fully achievable, but that is the benchmark, and one that is worth pursuing,  It is sustainable if held close, and continually renewed.   That is the spirit of the American experiment in equality and freedom, and is something worth fighting for.

“The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not.”

John Kenneth Galbraith, The Age of Uncertainty


"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson,  Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels


"Do not forget that every people deserves the regime it is willing to endure!

Please make as many copies of this leaflet as you can and distribute them.

The White Rose, First Leaflet, Munich, 1942

28 November 2012

Chris Hedges: The Wall Street Cult of the Self and Ochberg: Coping With a Narcissist



As Ochberg implies, psychopaths don't have ethical considerations, and narcissists and asocial personalities don't care.

In layman's terms I think most of these fellows have a great hole in their being. They know that something is not right with them, but their egos will not allow them to acknowledge it.

Those who gravitate toward the corporate power structures can be quite successful in some organizations.   But despite outward success they are always restless, unfulfilled, and tend to project their dissatisfaction outward and ascribe it to others.   If they succeed it is all them, but if they fail, someone else is at fault.

They are incapable of trust, because everything they do is a facade, a lie.   Therefore they rarely have a real relationship with their families, and at best view them as a desirable addition to their collection.  They have utter contempt for other people, although they will use flattery and other means to create a dependency while they are using them.  And after that is done, they will be discarded without another thought.

They are like sharks, endlessly seeking to fill their terrible emptiness with possessions, be they things or other people. They are literally insatiable in their needs, and highly focused in their pursuit of them.

They are very clever in finding the weaknesses in people and organizations, and will exploit them ruthlessly. Ethics and conscience provide no brake or boundaries on their willingness to say and do anything that is required to achieve their ends.  If you attempt to thwart, be prepared for something a little different, and completely off the hook in response.

It is really something to see them at work. The destruction they can wreak, sometimes with remarkably superficial charm and high verbal acuity, is hard to describe until you see it in action.

They are always a challenge to the HR and compliance departments, and frequently end up badly, one way or the other. It becomes a personal challenge to see how far one can go without being stopped, far beyond any personal needs or requirements.  Flouting the rules becomes a game in itself.






Gold Daily and Silver Weekly Charts - Post Op-Ex Boogie Woogie


"Fairness means not to use fraud and trickery in the exchange of commodities and services and the exchange of feelings...Exploitation and manipulation produce boredom and triviality; they cripple man, and all factors that make man into a psychic cripple turn him also into a sadist or a destroyer."

Erich Fromm
See the intraday commentary about the post-option expiration shenanigans here and here.

Sprott seems to have the silver pedal to the metal.  Read about that here.



When the gold market starts rockin', the pigmen come knockin'.




SP 500 and NDX Futures Daily Charts - Fiscal Cliff


This is the end of the month.

Apply paint to tape, allow to dry.




Comex Open Saw 24 Tonnes of Paper Gold Dumped at Market - Sharks, with Laser Beams

 

I am open to more data and other possibilities, but it certainly looks like the infamous Dr. Evil strategy being employed for the Comex post-option expiration in which a large number of call options are turned into active December futures contracts, and then hit hard with a manipulative price effort the next day. I suggested that this might happen given the way in which the option market closed on Tuesday.  Such phenomena are like old friends now in these markets.

Funny too how roughly the same thing happened in the Silver futures about the same time. Silver is also post option expiration today. 

As you know I used to track the big price drops around key option expiration dates on the precious metal charts.

That is not the only possibility. It could also be some 'tape painting' as the big shorts knock the price down before they close the books on their losing positions for the month. But I am inclined to think it was a special post-expiration event.

And it *could have been* just an unfortunate accident that happened in two different and important global markets simultaneously.  Maybe it just 'vaporized.'

Not to worry, I am sure Bart Chilton and the stalwarts at the CFTC, who are closely watching the gold and silver markets, have already identified the seller(s), and examined their selling motivations, and the size and placement of their 'fat finger.' I am sure they will let us know about it, four or five years from now.



"Gold saw a massive 24 tonne sell order (7,800 contracts) at 08:20 a.m. New York time - bang on the opening of the world's largest gold exchange - which [saw] a fall of 2.25% in the market price.

If the selling was year-end profit-taking then it was inept. Dealers try and finesse big sell orders into the market to get the best (highest) price for the biggest volume they can and thereby optimize profit - that requires stealth. If on the other hand it was a "fat finger" episode as has been suggested with a broker said to be looking to roll his December gold futures contract then it was even more inept.

More likely this could be a short play, with the seller looking to trigger stops below the market at $1730 and thus extend the move significantly lower and thus increase his profits. If so, he certainly caught the market on the hop as the move is counter-intuitive with everything else that is going on in the economy.

Rising concerns about whether Democrats and Republicans can find common ground between tax increases and entitlement spend reduction remains to be seen. More importantly, the US reaches its law-enshrined debt ceiling of $16.4 trillion early to mid February 2012. That promises fireworks again as it did in August 2011 when gold hit an all time high of $1922 as the market stares into the abyss of a possible US debt default.

Against the current economic backdrop, a short seller would have to be quite brave. In short, we will not know the identity or the reason for the sale for a while. Longer term gold investors should not however be deterred - the rationale for buying gold is as favorable as ever and a degree of patience required.

Ross Norman, CEO, Sharps Pixley, London, Flash Crash in Gold - Whodunnit?


All Wall Street Knows Is...




How Iceland Restrained the Anglo-American Banks: CBC Interviews Ólafur Grimsson


As you have read here and elsewhere, there is the 'Japanese model' and the 'Swedish model' for dealing with a crisis caused by asset bubbles and fraud from an oversized financial sector and an overly powerful segment of monied interests. 

It is obviously a simplification to slot such a policy issue into two models, but it has some philosophical validity with regard to the resolution of the bad debt that follows such a period of financial recklessness by the Banks.

I should note that I have rarely if ever seen this sort of broader discussion of other policy alternatives in any mainstream US media, and certainly not during the presidential debates which tended to focus on soft issues, distractions, and style.

The Swedish model favors the disposition of the debt failures on the banks, and their management and bond holders.  The Japanese model seeks to sustain the financial status quo and their associated corporate cartels with public debt and social policy adjustments.

Iceland has famously followed the 'Swedish model.' Perhaps so well it may better be called the 'Iceland model.'

If it is not apparent, what made the difference was the resolute manner in which the people of Iceland rejected the deal offered to them by the Banks and their politicians.

Americans made some initial attempts to prevent such bailouts as in TARP, before their politicians caved in to the 'bullet and the bribe.'  But lost their fervor in the co-opting of the Tea Party movement, and even turned against the Occupy Wall Street movement in the face of a determined media campaign to portray them as outsiders, cranks, and radicals.  

As a smaller nation with a stronger sense of community, the Icelanders receive more of their information from diverse and direct personal sources, rather than through interpretation and packaging of the news by a few large media outlets. They also seem less disposed to make a 'war on the weak' amongst their own people than the larger, more impersonalized nations with less homogenous populations.

The US, the UK, and the rest of Europe are currently following the 'Japanese model' of pretend and extend, supporting those who benefited from the bubble, the wealthy elite, with sovereign debt and a policy of austerity for the public. 

The US and the UK seem likely to do so since they are the home ground of the banking cartel and the financial status quo, but the path that Europe is taking is a bit of a surprise considering they are supposed to be progressive and 'socialists.'  It is no wonder that many of the key decision making slots are being 'handled' as they are by the monied interests, and their friends in big media are weaving a campaign of pride and nationalistic divisiveness to harness the darker side of human nature.  It has worked before, at least twice in Germany during the last century, as you may recall.

Neither approach is easy or perfect.  But it does seem that one is more just and effective than the other.



Net Asset Value Premium of Certain Precious Metal Trusts and Funds - Sprott 'All In' Silver


I was very surprised to see that the Sprott Physical Silver Trust has taken their cash levels, newly replenished by a follow-on offering, down to less than $2 million US dollars with the acquisition of additional ounces of silver bullion. They recently raised at least $270 million in a follow-on offering.

Their press releases do not clearly indicate if the underwriters actually executed on their additional allotment which would have brought this to $310 million. All of it has apparently been used to purchase silver bullion.

No one can say that Eric Sprott and his team is not bullish on silver at these prices.

I have not been able to independently calculate the current 'burn rate' on salaries and expenses because of the persistent activity of expansion, but it does seem that another offering is in the cards for sometime in the first quarter of 2013, unless there is some unbooked cashed still coming or a future redemption of units.

From their September 30, 2012 financial release:
"Operating expenses for the period July 1, 2012 to September 30, 2012 amounted to $377,778 (not including applicable Canadian taxes) compared to $173,762 for the same period in 2011. Operating expenses for the period from January 1, 2012 to September 30, 2012 amounted to $1,343,411 (not including applicable Canadian taxes) compared to $701,448 for the same period in 2011.

The increase in expenses was primarily due to higher legal, audit and listing fees over these periods, as well as an increase in the bullion storage fees associated with the higher volume of physical bullion held by the Trust. Operating expenses for the period from July 1, 2012 to September 30, 2012 amounted to 0.13% of the average net assets during the period on an annualized basis, compared to 0.08% for the same period in 2011.
Sprott Silver has not yet updated their listing of silver bars in inventory from this most recent expansion. As they stated in their press release:
"As of November 12, 2012, the Trust has contracted to purchase a total of approximately 7.127 million troy ounces of physical silver bullion. Once the Trust has taken delivery of all the silver bullion, it will publish the serial numbers of all bars held by the Trust on its website."
So it appears that Sprott Silver is telling the global bullion market, 'stand and deliver,' in London good delivery bars of silver, and not paper promises.

I took my own cash levels down considerably this morning, although I do remain hedged.



Bear Raid In Gold and Silver After Option Expiration


As I noted yesterday, a large number of options were 'in the money' for the Comex option expiration. As you know, these options become active futures contracts on the following day.
"The metals went out on a quiet expiration, with a decent amount of options closing in the money. They will be converted to active futures contracts tomorrow. I expect some market action on this."
It is not unusual for the market manipulators to deliver a serious 'gut-check' to the holders of those contracts, especially those of the spec variety, to try and shake them out of their positions in a forced selling of stop-loss orders and margin calls.

Just another facet of financial repression, times of general deception, and the ongoing war on the public interest.

Let's see what the rest of the week may bring.




War on the Weak, the Elderly, the Disabled, the Outsider


“You may choose to look the other way, but you can never say again that you did not know.”

William Wilberforce








"The inability to identify with others was unquestionably the most important psychological condition for the fact that something like Auschwitz could have occurred in the midst of more or less civilized and innocent people."

Theodor Adorno


27 November 2012

Gold Daily and Silver Weekly Charts - Quiet Option Expiration


Today was the last trading day of the month for most US firms.

To preserve and protect, the Wall Street monopoly that is, those vigilant folks at the Gensler CFTC have acted to prohibit Americans from punting their opinions on Intrade. This decision did not take the requisite four years it seems to take that august body of regulators to do anything of benefit for the average American investor.   CFTC Decides to Shut Down InTrade For Americans

The metals went out on a quiet expiration, with a decent amount of options closing in the money. They will be converted to active futures contracts tomorrow. I expect some market action on this.

Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry
Nov. 27 Comex December copper options expiry
Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex November copper futures last trading day
Nov. 28 Comex December E-mini copper futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day
Nov. 30 Comex December copper futures first notice day
Nov. 30 Nymex December palladium futures first notice day

Fed Warns of Risk of Financial Cyber Attacks





SP 500 and NDX Futures Daily Charts - Sell on Close and Green Mountain


Treasury declined to name China as a currency manipulator, although the reminbi is still significantly undervalued, according to a report released after the bell.

Green Mountain coffee exceed expectations in their earnings report.

The market was lackluster most of the day, and dropped in the last hour on an imbalance of 'sell on close' orders.

Today is the last day of the trading month for most firms.





L’Union Européenne de Goldman Sachs - Fascisme Économique


"The lamps are going out all over Europe, we shall not see them lit again in our lifetime."

Sir Edward Grey, 3 August 1914

OECD Slashes Growth Outlook, Warns of Recession

Dans la nuit du vampire des abysses



26 November 2012

Gold Daily and Silver Weekly Charts - Option Expiration Tomorrow


The metals had a day of consolidation ahead of the option expiration tomorrow on the Comex.




SP 500 and NDX Futures Daily Charts - AAPL Rally


Citi turned the market around with a bull call on AAPL today.

Markets were weak throughout the day with the AAPL led rally in the afternoon.




23 November 2012

Gold Daily and Silver Weekly Charts


Have a pleasant weekend.

See you Sunday evening.





SP 500 and NDX Futures Daily Charts






Bill Black: Financial Craziness on Three Continents


Another interesting commentary from Bill Black.

Would someone show Bill Black how to change the battery in his smoke alarm? Every time he comes on the Real News the background chirping on my computer system's surround sound has me reflexively checking my own. lol.



Closer Look at Gold Chart's "Cup and Handle" and the Handle Details - Blitzsilberkrieg


As a reminder there are option expiration in gold and silver on the Comex next week on Tuesday the 27th.

My friend Dave says he sees a bulge around 1800 in the gold option positions that could mark the heart of the resistance. This coincides with my own thinking.

As you know, I have anticipated this inverse H&S targeting that outer perimeter from 1790 to 1810 of the bears' Maginot line at 2000-2100.

Let's see if gold can be broken out by a distracting run from silver that shocks the bullion banks in a blitzsilberkrieg, a quick advance from out of this trading range to to upper limits of resistance at 40.

The terrain is easily marked as in the last chart below, and the potential for it is in the market positioning of bullion demand and the big paper shorts.






Net Asset Value Premiums of Certain Precious Metal Trusts and Funds


The dichotomy in premiums between the Spicer Funds (CEF, GTU) and the Sprott Funds (PHYS,PSLV) is remarkable.

Either the Sprott Funds have now become large and liquid enough to become trading vehicles for the desks, including those who have underwritten the shelf offerings, or investors have become shy given the repeated and somewhat heavy-handed treatment of the expansions. Perhaps a bit of both.

A highly simplified pair trade would be to go long SLV and to short PSLV, for example, to take the premium on PSLV. This would tend to compress the volatility in PSLV into sharp bursts as these trades strengthen and weaken, and then fall apart. The pros can manage the risk in it, but the specs will get something more than the premium handed to them on the breaks. This is one of those 'LTCM trades' that look quite good on paper, and supply some nice gains, with a hidden barb of risk.

Next week is an option expiration in gold and silver bullion futures, and there is a fairly obvious attempt to 'hold the line in price' before then. As I have said, the next big resistance on my charts is in the 1790-1810 area. It is the outer permimeter bears' Maginot Line at 2000-2100.

From a Nov 19 posting:
"The inverse H&S pattern measures to 1810 as a minimum objective. That is also the point at which the handle would be at a breakout to validate the entire cup and handle formation.

I would expect gold to break out and run to that point, with resistance heavier around 1790-1810. There may be some time to actually break out, as the shorts will attempt to hold a strong line there and at the next major objective at 2100 or so, which is the first objective of the cup and handle."

Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry
Nov. 27 Comex December copper options expiry
Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex November copper futures last trading day
Nov. 28 Comex December E-mini copper futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day
Nov. 30 Comex December copper futures first notice day
Nov. 30 Nymex December palladium futures first notice day



21 November 2012

Chris Hedges and Marc Maron On Break Room Live


"When I despair, I remember that all through history the ways of truth and love have always won.

There have been tyrants, and murderers, and for a time they can seem invincible, but in the end they always fall.

Think of it--always."

Mohandas K. Gandhi


"For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places."

Ephesians 6:12



"Good men and bad men alike are capable of weakness. The difference is simply that a bad man will be proud all his life of one good deed - while an honest man is hardly aware of his good acts, but remembers a single sin for years on end...

Human groupings have one main purpose: to assert everyone’s right to be different, to be special, to think, feel and live in his or her own way. People join together in order to win or defend this right.

But this is where a terrible, fateful error is born: the belief that these groupings in the name of a race, a God, a party or a State are the very purpose of life and not simply a means to an end.

No! The only true and lasting meaning of the struggle for life lies in the individual, in his modest peculiarities and in his right to these peculiarities...

I have seen that it is not man who is impotent in the struggle against evil, but the power of evil that is impotent in the struggle against man.

The powerlessness of kindness, of senseless kindness, is the secret of its immortality. It can never by conquered. The more stupid, the more senseless, the more helpless it may seem, the vaster it is.

Evil is impotent before it. The prophets, religious teachers, reformers, social and political leaders are impotent before it.

This dumb, blind love is man’s meaning. Human history is not the battle of good struggling to overcome evil. It is a battle fought by a great evil, struggling to crush a small kernel of human kindness.

But if what is human in human beings has not been destroyed even now, then evil will never conquer.”

Vasily Grossman, Life and Fate

I do not know if I would call it senseless kindness, but selfless, in the sense that if you lose yourself to love, you will find a true happiness and lasting life.


Gold Daily and Silver Weekly Charts



Shenanigans-lite, as expected.

I am off to purchase the bounty of the harvest.

Happy holiday everyone. See you Thursday evening perhaps.






SP 500 and NDX Futures Daily Charts


Tediously boring day as expected, as the adults are doing other things and have left the desks in the capable hands of their juniors, who are operating under set formulae.

Happy Holiday to all in the US, and for the rest of the world, please try to carry on.




FDR's Thanksgiving Day Proclamation - 11 November 1942


There are times when we fall to our knees and thank God for all His blessings and tender mercies.

And there are other times when we arrogantly refuse to bend or bow, and to defer to anything but ourselves, in a kind of misplaced self-sufficiency and complacent pride. And then God brings us down to our knees first, to remind us, in His providence, of who we are, and how to be grateful for what we have been given.

"It is a good thing to give thanks unto the Lord."
Across the uncertain ways of space and time our hearts echo those words, for the days are with us again when, at the gathering of the harvest, we solemnly express our dependence upon Almighty God.

The final months of this year, now almost spent, find our Republic and the nations joined with it waging a battle on many fronts for the preservation of liberty.

In giving thanks for the greatest harvest in the history of our nation, we who plant and reap can well resolve that in the year to come we will do all in our power to pass that milestone; for by our labors in the fields we can share some part of the sacrifice with our brothers and sons who wear the uniform of the United States.

It is fitting that we recall now the reverent words of George Washington, "Almighty God, we make our earnest prayer that Thou wilt keep the United States in Thy holy protection," and that every American in his own way lift his voice to Heaven.

I recommend that all of us bear in mind this great Psalm:
The Lord is my shepherd; I shall not want. He maketh me to lie down in green pastures; he leadeth me beside the still waters.

He restoreth my soul; he leadeth me I the paths of righteousness for his name’s sake.

Yea, though I walk through the valley of the shadow of death, I will fear no evil; for thou art with me; thy rod and thy staff they comfort me.

Thou preparest a table before me in the presence of mine enemies; thou annointest my head with oil; my cup runneth over. Surely goodness and mercy shall follow me all the days of my life; and I will dwell in the house of the Lord for ever.
Inspired with faith and courage by these words, let us turn again to the work that confronts us in this time of national emergency : in the armed services and the merchant marine; in factories and offices; on farms and in the mines; on highways, railways and airways; in other places of public service to the Nation; and in our homes.

NOW, THEREFORE, I, FRANKLIN D. ROOSEVELT, President of the United States of America, do hereby invite the attention of the people to the joint resolution of Congress approved December 26, 1941, which designates the fourth Thursday in November of each year as thanksgiving Day’ and I request that both Thanksgiving Day, November 26, 1942, and New Year’s Day, January 1, 1943, be observed in prayer, publicly and privately.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the United States of America to be affixed.

DONE at the City of Washington this eleventh day of November, in the year of our Lord nineteen hundred and forty-two, and of the Independence of the United States of America the one hundred and sixty-seventh.

FRANKLIN D. ROOSEVELT

New Twists In MF Global Scandal Focus On the CFTC - A Bastille of Deceit


Mark Melin has been doing an excellent job of covering the MF Global scandal and cover up. With a few notable exceptions like Forbes, the mainstream media has been silently complicit. Investigative journalism is far less safely profitable than staged debates amongst commercially endorsed opinionators. The news gives way to spectacle.

This is an excellent example of the credibility trap. That blatant theft occurred and no indictments and prosecutions have resulted seems so unbelievable that most tend to ignore it.   You don't understand, it takes time, it takes time. Yes, to cover things up, to kick the can down the road, and hope that the people lose interest.

And yet this is just one instance of the distortions that are plaguing the global commodity and financial assets markets. The long delayed investigation into the silver market is most likely another.

The most urgent problem facing the US and the Western nations is not a 'fiscal cliff.' It is the pernicious corruption in the financial system that has captured the politicians of both parties, and distorted the public conversation through influence in the media and directing the opinions and buying the research of 'experts' through the power of big money.  The people are held hostage in a Bastille of deceit.

What a condemnation it is, that so few love the truth for itself, and willfully turn from it, being led in their choice by the lies that favor their particular flavor of greed, and rotten self-interest.

New Twists In MF Global Mystery Focus on CFTC
By Mark Melin

A delay in a Congressional report set to outline details surrounding MF Global findings was announced at the annual Futures Industry Association (FIA) conference just as insight regarding likely criminal behavior that damaged commodity market integrity moves into plain view.

Over the past weeks Dan Roth, president of the National Futures Association, a primary front line regulator for the futures industry characterized the actions leading to missing MF Global funds as theft. Mr. Roth has pointed to the fact it matters not if the illegal funds were transferred to the benefit of an individual, as in the case of PFG, or if the illegal transfer of customer assets was due to meet operational needs of the company.

Any such transfer is considered legally theft. In fact, could the argument be made that Russ Wassendorf, founder of PFG, had transferred customer funds to support ongoing company operations? If Mr. Corzine is allowed to transfer customer funds to cover firm operational expenses, is Mr. Wasdendorf allowed the same courtesy?

While the primary focus is on the initial criminal acts leading up to the firm's bankruptcy, the potential cover-up that occurred afterwards, like Watergate, could be more troubling.

Highlighted are two points of potential criminality: the initial phase, when illegal money transfers were hidden by false segregation reports; and the cover-up phase, where the CFTC was in possession of potentially criminal information and knowingly withheld this information. CFTC's inaction and withholding of critical information, particularly in court, resulted in significant damage to the integrity of the segregated account.

The Initial Offense:
The first phase of likely criminality has been documented by both regulators and industry participants:
  1. On Wednesday, October 26 2011 MF Global was given clear instructions from regulators not to transfer assets.
  2. After this order, MF Global transferred assets from customer accounts so it could cover its in house trading losses.
  3. The illegal asset transfers were initially hidden by false segregation reports submitted to regulators. These segregation reports were known to be false on Sunday, October 30, 2012, as the customer shortfall was the reason for inaction to sell MF Global to Interactive Brokers.
The Cover-up Offense:
The second phase, the little known aspect of misrepresentations that diminished the rights of MF Global customers and damaged market integrity, occurred after the now infamous Halloween weekend of 2011:
  1. On Tuesday, November 1, 2012, MF Global went to court with the express purpose of providing testimony relative to the bankruptcy of MF Global holdings. In testimony, an MF Global legal representative represented that funds were accounted for, but did not mention known contradictory information, some of which is considered criminal in nature.
  2. This testimony was delivered to the court while MF Global and the CFTC where acknowledged to possess information that a shortfall in customer assets existed, the asset transfer occurred after MF Global was given orders by a regulator not to transfer assets and reports provided by MF Global contained false information.
  3. Perhaps most egregious, a CFTC lawyer, in attendance on directions from Washington, D.C. did not object when the agency possessed information contradictory to MF Global's testimony.
  4. Had the CFTC objected or otherwise reported to the court at any time what it is documented to have been known, a fraud investigation would have likely ensued, MF Global customers would have retained their rights and the segregated account would have been defended.
(For details and documentation, see the article below entitled "Who Knew What and When Did They Know It?")

Delay in Congressional Report on MF Global Announced

The keynote speaker at the FIA event was Congressman Randy Neugebauer. Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year. The goal of the Congressional report, like the Giddens Trustee report, is not to identity potential criminal behavior but rather spotlight areas of concern.

It was set to release the report on the one year anniversary of the MF Global affair, but has been delayed...

"The MF Global affair is not complicated," was one message communicated to Congressman Neugebauer. "Are you aware of what occurred in court on November 1, 2011 and what the CFTC did NOT do?" was another question asked by this reporter, to which Congressman Neugebauer responded "MF Global had weak risk controls." Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year.

"The significant point is MF Global willfully ignored CME's order not to transfer customer funds," notes attorney and Customer Commodity Collation President James Koutoulas. "If the transfers were proper, why wouldn't they just ask for CME Group's approval?" The CME Group was MF Global Designated Self Regulatory Organization (DRSO) and had front line regulatory authority over MF Global.

Read the entire story with links here.