"The more I look at it, the less benign this bailout deal appears. Indeed it looks to me as if it was set up to do considerable damage to the Greek economy. Once this becomes apparent, Greeks are surely likely to change their minds about staying in the Euro. And I'm afraid I think this is the point. One way or another, Greece is on its way out of the Eurozone."
After the bell Microsoft and Yahoo showed weak results and Apple was an outright miss.
The stock cheerleaders were nervously trying to find something nice to say about AAPL All of these were getting lightly spanked after the bell. These are our new gods of the market!
Let's see how long the illusion can be sustained.
This is not the kind of situation that lends itself to reform. Or recovery.
If you have not done so already, it is probably time to take profits in US equities.
The advance is so narrow it is almost chilling, with the upward momentum in stocks down to a handful of new era tech giants.
Down volume was almost double up volume on the broader market. The wiseguys were taking profits.
The Paypal 'ipo' was brought out today in the fluffy new era atmosphere, and did well. And this was probably the greatest motivator behind this latest 'rally.'
IBM beat EPS estimates but missed revenues after the bull. IBM is, alas, a once great company that is now a dead man walking, sustained by accounting theatrics at these price levels.
These jokers are financial TV are incredible. I watched CNBC this afternoon and I could almost feel my IQ declining. They could, and probably should, be selling blenders on the Home Shopping Network.
This calculated slamdown was a little enthusiastic even by current market standards, or lack thereof.
About seven thousand gold futures contracts, representing 21.8 tonnes of paper gold, were dumped at market in less than one minute driving the price down to $1,080.
Several thousand contracts were bought back in the following two minutes.
No legitimate profit-oriented sellers would operate in this manner, since they are selling against themselves. You do not dump large volume without limit into a quiet market unless you are trying to disrupt the price.
A similiar operation happened in silver.
Who would suspect a thing? Certainly not the regulators, or even some market 'reformers.' Not when something is so obvious.
I think this is another conveniently timed, clumsy attempt to clear out more of the August open interest and give a nice shot to the gut for any foolish enough to still buy options on the Comex. The next precious metals option expiry is on the 28th July.
"Gold has worked down from Alexander's time. When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."
Bernard M. Baruch
Asia continues to add significant amounts of gold bullion to their wealth reserves.
Wall Street and its sycophants would like us to consider gold to be just 'a pet rock' or 'like trading sardines.' And yet central banks have turned to be net buyers, and Asia and the Mideast continue to buy bullion in record amounts. Talk to the Chan.
One of the few coherent things Alan Greenspan said was that statists of all persuasions, both right and left, have 'an almost hysterical antagonism towards gold.' This is because gold resists their will to power over others.
So why isn't gold 'working' at this moment in history?
"We hypothesize that, having learned from the misadventures of the 1960s, the policy elites, well-versed in the practice of financial engineering and market manipulation, would have seen no need to dump stocks of government gold reserves onto the market, 1960s style, to keep the price in check.
Instead, synthetic gold, sourced in pyramids of credit extended to bullion bankers by central banks with little or no claim on physical substance, have provided a more efficient, better-camouflaged form of intervention. COMEX synthetic gold and related over-the-counter derivatives are traded in macro strategies implemented by hedge funds, high-frequency trades, and commodity funds in pair trades with interest-rate, currencies, equity futures, or even more exotic offsets. The volumes traded are huge, and bear little resemblance to actual flows of physical metal.
We suspect that shorting gold has come to seem like a riskless proposition as long as there is confidence in the Fed. Synthetic gold is the perfect substance for a carry trade: an easy borrow with very low carrying cost and little upside basis risk. Such a hypothesis, in our opinion, does much to explain the incongruity of a declining gold price while fundamentals for paper currency, and the U.S. dollar in particular, obviously deteriorate; while demand for physical gold has exceeded new mine supply for several years running; and while above-ground 400-ounce .995-gold bars located in London, New York, and other financial capitals (in cohabitation with speculative trading activity in paper markets) have steadily dwindled and disappeared into Asian financial centers reformulated as .9999 kilo bars."
The dumping at market of very large amounts of paper assets into quiet market hours has been well documented in many places. It is a well worn market manipulating strategy abused by some very large trading desks, often playing with other people's money. Citi privately called it their 'Dr. Evil Strategy.'
It is funny how the systematic rigging of so many financially related markets has been revealed, but the blatant manipulation of the precious metals market, which is certainly knowable by anyone with a basic knowledge of the markets and a computer terminal, is so willfully ignored. A love of money, lust for power, and a lack of integrity will alloy to make people hypocrites.
When we see such trash articles being written, and passed along mindlessly by those who yearn to warm themselves by the fires of the oligarchs, we know that gold has cast a cold fear into the hearts of those who would be kings, and their privileged servants.
And considering the long, cynical rally in paper assets that culminated in the financial crisis of 2008, when people start believing in the power of fraud and willful distortion of markets, we can only say as we did then, this will end badly.
A man cannot serve two masters. He will love the one and come to hate the other. You love what you serve.
China made its long awaited restatement of its official gold reserves, and it was widely received as a 'lowball number.' China was under some pressure from official central bankdom to update its numbers, the last time being in 2009. And since they are trying to play nice, and have their yuan including in the SDR basket of currencies, they had to say something. I am not sure how to take it except with some serious skepticism.
I include two new charts below that compare the performance of gold against the euro/dollar cross and the inverse of the dollar DX index. Clearly at this point gold is running inversely against the strong dollar and with the weaker euro.
This situation in the markets has 'extreme' and 'fragile' written all over it. I am not quite sure if we are at the 2007 level yet, but we are closer to that than we are to any sustainable economic recovery by a long shot.
The ratio of paper claims to physical gold continues to creep higher at over 97:1 as shown below. Rather than allow the price to rise to make more physical gold available the bullion banks keep selling their paper gold, raising and reraising the stakes to shake out the gold longs ahead of the throw down for August expiration on July 28th and more importantly the active months of August and December. If you were fearless about losses, you might choose to play their brand of poker the same way.
I hesitate to call any of this 'capitulation' because it is becoming such an obviously artificial situation. But I suppose at some point someone or something has to stop this, as the collapse of the Bear Stearns hedge funds led to the demise of Lehman, and the collapse of the paper credit bubble in 2007-8.
I suspect that the paper bubble in precious metals will have quite a bit of company this next time around, especially in a narrow group of grossly overpriced stocks and distressed debt.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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