William K. Black's Public Eye Speech at Davos - 'Mankiw Morality'

"Greed, I say, is a great flood; it is a whirlpool that sucks a person down, a constant yearning, always seeking a hold, continually in movement."

Siddhārtha Gautama Buddha


“Just as it was in the days of Noah, so will it be in the days of the Son of Man. People were eating, drinking, marrying and being given away in marriage, up to the very day Noah entered the ark. Then the flood came, and swept them all away."

Luke 17:26-27


"What is the appropriate behavior for a man or a woman in the midst of this world, where each person is clinging to his piece of debris? What is the proper salutation between people as they pass each other in this flood?"

Leonard Cohen

Gold Daily and Silver Weekly Charts - Rally on FOMC Day

Gold and silver advanced today on much weaker than expected GDP report, and with a negative deflator, a green light for the Fed to keep growing that balance sheet.

I suspect they will break through the five trillion level before this leg of printing is over.

Jobs Report on Friday. Tomorrow is the end of the month.

SP 500 and NDX Futures Daily Charts - Negative Data and a Pullback

The GDP report for 4Q 2012 was negative today, and even that with a negative chain deflator.

Stocks pulled back after the Fed did nothing new.

Jobs Report on Friday.

The uptrend is not yet broken in stocks. The overbought condition was getting ridiculous.

FOMC January 2013 Statement

"The foundations of the Maginot Line were the war cemeteries of France."

Vivian Rowe, The Great Wall Of France, 1959

Nothing really new in the FOMC statement, but we have to view this in the light of the shocking revelation from the recently released Fed Notes that they failed to see the crisis coming even in the days before the financial system teetered on collapse.

These are old and tired generals, fighting new wars with the old tools and tactics.

Until the banking system is reformed, the Fed will continue to attempt to prop it up, and stand by doing little else while the real economy stagnates. Except perhaps to foment yet another imbalanced, unstable bubble in financial instruments.

Press Release

Release Date: January 30, 2013

For immediate release

Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors.

Employment has continued to expand at a moderate pace but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement.

Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate.

Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.

Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.

In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

Obama Administration's Failure to Reform Wall Street and Investigate Fraud

No matter what progressive words he wishes to say, this is 'the tell.'

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Premiums remain almost shockingly thin even as gold and silver rally.

Gold has not quite returned to its pre-end-of-year smackdown that began in December of last year, needing to hit 1720 for that to happen.

Commentary on the precious metals has been riding the 'downward spiral of dumbness' in the past week, as gold bears become emboldened and begin to abandon mere negativity in favor of sheer ridiculousness.

What was most suprising this morning was not the negative GDP print, but the negative chain deflator that went along with it, and facilitated a 'better' GDP number than we would have otherwise seen. That is, instead of the expected 1.6% chain deflator as an indication of inflation, the negative deflator that was used was -0.6%.  Otherwise the real GDP number printed would have been quite a bit worse.

I don't think we have seen a negative deflator since the Great Crash of 2008, and not often before that either.

Still I doubt they will take this one seriously since they can blame it on Hurricane Sandy, uncertainty over the fiscal cliff, and the dockworkers strike.

Chain deflators with plenty of leeway are a wonderful way to overstate growth, hide decay, and mask the effects of monetary inflation. Unfortunately they cannot provide real growth, economically viable jobs, and a decent standard of living. Only reform and transparency can do that for the West.

So far the metals are still in a broad trading range. I have some optimism that we will see a breakout, and a new rule set for a cup and handle in the face of extreme market pressure. But one thing at a time.    Do not expect this to be easy as the currency war intensifies.

Gold Daily and Silver Weekly Charts

Amazon booted its earnings and revenues after the bell, and guided lower.

Jeremy Siegel says to avoid gold and silver and take the safety of stocks as the financial paper cheerleaders had their pom-poms out today. Because 'stocks are cheap' and 'going much higher.' Risks? What risks?

FOMC tomorrow. Jobs on Friday.

If they cannot take gold down lower this week, the shorts may be in for a rough time.

SP 500 and NDX Futures Daily Charts - Yowza Yowzer Get Yer Hot Stocks

Shades of bubbles past, Jeremy Siegel was the 'closer' on Bloomberg TV and he was pounding the table for stocks. He called for Dow 15,000.

Amazon missed earnings and revenues after the bell. And they lowered sales guidance.

Consumer confidence plunged today.

The SP Futures managed a close over 1500, and VIX retreated.

FOMC tomorrow, and Jobs Report on Friday.

Kitco Corrects Their Gold Lease Rates Error

Kitco has corrected the significant error in their gold lease rates.

They corrected it the day after gold options expiration.

Before

After

US Consumer Confidence Plunges

What is wrong with the little people, these takers and fakers? Confidence has never been better on Wall Street.

Look at the VIX and the SP 500, and booming home prices in the Hamptons. Get with the program.

Lloyd Blankfein just had a $21 million pay day. He's filled with confidence. And Jamie Dimon is walking on water.

Fraud and deceit will continue until confidence and trust improve.

MarketWatch
Consumer confidence drops in January
By Ruth Mantell

WASHINGTON (MarketWatch) -- A gauge of consumer confidence dropped in January to the lowest level since November 2011 on lower expectations and gloomier views of the present situation, according to data released Tuesday.

The Conference Board said its consumer-confidence index dropped to 58.6 in January, missing analysts' estimates of 64.3, from an upwardly revised 66.7 in December.

A prior December estimate pegged the level at 65.1. "Consumers are more pessimistic about the economic outlook and, in particular, their financial situation," said Lynn Franco, economic indicators director at the Conference Board...

Gold Daily and Silver Weekly Charts - Comex Option Expiration - Kitco Lease Charts Wrong

Today was an option expiration for silver and gold on the Comex.

Speaking of lease rates, Kitco's numbers do not even agree with their very graphic lease rate charts.

Nice mistake to make on the option expiration.

I made a calendar that shows the Comex gold and silver expiration dates here.

Tomorrow begins a two day FOMC meeting. Jobs Report on Friday.

SP 500 and NDX Futures Daily Charts

VIX had a bit of a pop today, but nothing significant yet.

There is a two day Fed meeting this week.

Gold and Silver Option Expiration Calendar for 2013

I put together a calendar for the gold and silver option expirations based on the Comex contract information.  I looked for one with the usual suspects and could not find it.

The Comes does not have any silver options listed yet for October and November.

I will try and update any changes which they make as they year goes on.

Much Ado About Lease Rates - FOMC and Option Expiration

Here is the update from the LBMA on the Gold Forwards.

It shows little change, and even a slight increase today Monday.

The LBMA do not update LIBOR in real time, but do so with a lag. 

I did not see anything untoward in the LIBOR rates on another site, so I suspect that Kitco will be revising their charts sometime.

The only negative I see for gold is that this is an FOMC week.  And of course today is the February Option Expiration on the Comex.

The expiration date for the February 2013 options contract for Copper Option (HX), Gold Option (OG), and Silver Option (SO) is Monday, January 28, 2013.

I would not mind hearing an explanation for those Kitco gold lease prices chart from either Kitco or Sharefin.

Kitco Shows Recent Plunge to Negative In Gold Lease Rates

Here is what they are showing.

I am wondering if Kitco did not use a bad LIBOR quote in calculating this.

As you may recall the lease rate calculation is LIBOR - GOFO (Gold Forward Offered Rates) = Lease Rate.

A drop in lease rates like this might presage a sell off attempt in gold, or an influx of leased gold to meet some short term delivery pressures or demands for allocation from unallocated sources.

Here is something I wrote about this in the past, when lease rates had dropped.

I suspect Kitco may have miscalculated the data by using a bad LIBOR number, but lets see what happens tomorrow, and I'll do the math myself if they do not correct this.

PS. Later, a reader informs me that he thinks they did miscalculate.  I will give it a day.

When I Despair...

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.

Mahatma Gandhi

And remember, no matter how bleak things may appear, the Dude abides.

Like the rug, he really does tie the room together.

Bill Moyers: The Senate's $500 Million BiPartisan Corporate Welfare Gift to Amgen

Mitch McConnell Republican from Kentucky, Max Baucus Democrat from Montana, and Orrin Hatch Republican of Utah.

"...we have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. It is not merely that at present the rule of naked force obtains almost everywhere. Probably that has always been the case.

Where this age differs from those immediately preceding it is that a liberal intelligentsia is lacking. Bully-worship, under various disguises, has become a universal religion..."

George Orwell, Review of Bertrand Russell's Power: a New Social Analysis in Adelphi Magazine, January 1939

Edward R. Murrow: Good Night, And Good Luck

"All I can hope to teach my son is to tell the truth and fear no man...

If none of us ever read a book that was "dangerous," had a friend who was "different," or joined an organization that advocated "change," we would all be just the kind of people Joe McCarthy wants...

The only thing that counts is the right to know, to speak, to think — that, and the sanctity of the courts. Otherwise it's not America.

No one man can terrorize a whole nation unless we are all his accomplices."

Edward R. Murrow, speech to his CBS News staff, 1954


“The term propaganda rings melodramatic and exaggerated, but a press that—whether from fear, careerism, or conviction—uncritically recites false government claims and reports them as fact, or treats elected officials with a reverence reserved for royalty, cannot be accurately described as engaged in any other function.”

Glenn Greenwald

James Turk and Chris Martenson: Central Banks Losing Gold and Silver Price Suppression

Source link here.



Related: World Plunges Into Currency War - BusinessWeek

Gold Daily and Silver Weekly Charts - No Need for Safety Buy Stocks

That seems to be the talking points memo for financial television this week.

Grab a seat on the miracle market before they are all sold out.

The market is utterly overbought and VIX is complacent. But it can stay that way in light volumes. The market can remain irrational longer than you can remain solvent.

I have marked the trendline on the last chart along with the money flows and RSI.

The real economy can no longer afford to tolerate its corruptly inefficient financial system. That is the long and short of it.

And at some point, people will realize this, and something will happen.