Gold Daily and Silver Weekly Charts - Goldman Says 'Sell' And So They Do

Stocks were shaky but unchanged this morning, when Goldman came out and issued a 'sell' on the SP 500.

This shook the markets, but what really started them sliding were rumours that spread across the financial news channels and trading desks that Moodys would downgrade 17 global banks tonight, with a three level downgrade on Morgan Stanley.

Now whether this was true or not, the selling increased, and stocks and commodities went out on the lows in a steady trade.

I suspect quite a bit of this was engineered by some clever boys with an eye to the Russell index rebalancing tomorrow, and the end of month tape painting next week. They were playing games with the financials trying to suck in the bulls before the Goldman announcement for example.

But let's see what happens.

I took out the triple ETFs I owned today, including TZA and FAZ, since they had nice gains and I don't like to hold them except for brief trades.

I won't call bottom here for sure, but I did add a silver position for the first time in a while at this price below 27.

SP 500 and NDX Futures Daily Charts - Goldman Signals a Sell Off

The economic numbers came in a bit shakey this morning, but stocks were holding in as the metals were hit.

Interestingly enough the financial short ETF FAZ was running negative while the broader short ETFs were showing gains.

Goldman shook the markets with a 'sell' on the SP today, and then rumours were abounding of a big downgrade of the banks by Moody's tonight, including a specific rumour of a three level downgrade on Morgan Stanley.

This had the flavor of a trading desk operation today ahead of the Russell rebalancing tomorrow, but let's see what actually happens tonight, and what Moody might say.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Stocks and commodities started selling off hard today on rumours that Moody's would be downgrading 17 banks tonight, including a triple downgrade on Morgan Stanley.

Let's see if this really happens as the trading desks said. I found it interesting that just before the rumour came out, the financials were rallying and FAZ, the triple bank short, was running higher, contra market.

How Wall Street Financial Companies Stole Billions From Main Street

Funny how these stories of widespread and systematic financial corruption are so undercovered by the main stream media. Maybe it is because 'truth is a dagger pointed at their heart, which is their pocketbook.'

This is a long piece of investigative journalism, but well worth reading.

It is too bad that the Banks had their major nemesis, Eliot Spitzer, taken out by the Feds under Bush II. And they were able to buy off the White House and the Congress so that no one of substance is touched by indictment, much less conviction.

Later in the story Matt Taibbi mentions the LIBOR rigging scandal, and suggests the broader rigging of markets and the real economy by the financial interests.

In a way a brainwashed vocal minority of the people are to blame for this. Every time the move is made to reform this rotten system, and bring the banks and large financial corporations under control of the law,they pipe up, often hysterically, on cue that government has no business interfering with 'private enterprise.' These are the kind of unthinking used by the powerful as paid propandists, intellectual brown shirts, and even the unthinking and unpaid, known in the power trade as 'useful idiots.'

In political jargon, useful idiot is a pejorative term used to describe ordinary people serving as propagandists for a cause whose goals they do not truly understand, who are used cynically by the leaders of the cause.

The politicians and regulators are bought or cowed, and the people shout slogans calling for their own downfall.

Don't feed the sharks.  Don't let them turn you into a useful idiot.  Stop watching the propaganda stream and start thinking for yourself.

Stop letting these wiseguys play you for a fool, a sucker, a muppet, and a cockroach. Because that is what they think you are. You really don't deserve it. It just encourages them to be bolder, and discourages those around you from thinking that reform is possible. Think twice before you speak.

This is an old story, with the bad guys wearing different, more expensive suits, but the game remains the same.

"Do not fear your enemies. The worst they can do is kill you. Do not fear your friends. At worst, they may betray you. Fear those who do not care; they neither kill nor betray, but betrayal and murder exist because of their silent consent."

Bruno Jasienski

Rolling Stone
The Scam Wall Street Learned From the Mafia
By Matt Taibbi
June 21, 2012

Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo.

But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America.

The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from "virtually every state, district and territory in the United States," according to one settlement. And they did it so cleverly that the victims never even knew they were being ­cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.

Read the rest here.